Share prices will fall unless attention paid to the environment
Capital markets across the globe will see share prices fall in the long term unless proper attention is paid to environmental and social issues, a group of financial institutions has warned this week.
Speaking at the launch of the report at the UN Global Compact Leaders Summit in New York, UNEP Executive Director Klaus Toepfor said: "This new report is a crucial recognition from major financial institutions that the environmental and social components of sustainable development, as well as the economic considerations, should sit at the heart of investment and capital market considerations. It is clear that to protect shareholder value, the response must start with action today by companies serious about our environment and that wish to contribute to thriving communities worldwide."
The report found that aviation, insurance, oil, gas and utility companies already face material threats linked to climate change while some sectors were witnessing evolving opportunities in the form of new carbon markets.
Anthony Ling of Goldman Sachs, one of the brokerage houses that contributed to the report said: "We strongly believe in a full and consistent disclosure of CSR data by companies so that they can be included in fundamental company analysis, where we believe they belong."
More than 400 participants attended the one-day Global Compact summit, the largest ever gathering of chief executive officers, government officials and leaders of civic society and labour on the topic of CSR.
The Global Compact was launched in 2000 and consists of a set of voluntary principles for business covering social and environmental issues.
McKinsey & Company, the international management consultancy, also released a report this week, concluding that the compact has been a significant force for positive change. The report found that 67% of respondents had changed their corporate policies in relation to human rights, labour and environment principles since joining the compact, with 40% reporting that it was the Global Compact that had been a major driver of those changes.
The UN itself announced that it was the latest organisation to be undertaking an effort to integrate the principles of the Global Compact into its own internal operations. In a letter to UN staff, the Under-Secretary-General for Management, Catherine Bertini said: "The UN should always lead by example and be ready to comply with the same requests it makes of others."
She added that: "Although the UN does not knowingly contravene the Compact's principles in its administrative practices, the Organisation could and should be far more explicit in integrating the principles into its administrative processes."
By David Hopkins
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