Reality and Potential of Responsible Investment

Abstract

The potential of Responsible Investment has to be seen in relation to its mission: to act in ‘the best long term interest’ of savers and investors, to preserve their capital over the long term and in a way that ‘aligns with the broader objectives of society’, as stated in the Preamble of The UN Principles of Responsible Investment (UNPRI).1 This body places environmental and social issues at the center of the commitments its signatories pledge to uphold. Thus, it is fair to ask: have the pension funds and asset managers who have signed onto the UNPRI performed any better than other investors as regards upholding the best long term interests of their beneficiaries? In this chapter I want to compare the reality – how the RI community has actually behaved – relative to how it should have in the current crisis, and in the context of ‘the broader objectives of society’. My aim is to propose a number of measures that would help bring the reality of RI closer to its potential. I start with a quick summary of what the crisis is about, in particular to underline how it has negatively affected the interests of savers as regards their income, employment, and preservation of their savings. And to remark how little RI has done to prevent this.