In light of such democratization efforts, it will be even more important to be transparent and clear about the necessity, limits and consequences of responsible investment - Rebecca Worner.
HOW DID YOU GET INTO RESPONSIBLE INVESTMENTS?
During law school, I realized that typical legal work was not for me. I preferred broader public policy topics. After graduation, I worked in the public sector on different policy issues, including EU climate policy, and international trade and investment. In the latter context, I was involved in policy developments to advance sustainable foreign direct investment. My interest in deploying capital as a force for good led me to take up my current role at PMT.
IS THERE ONE THEME WITHIN THE SDGS THAT YOU SPECIFICALLY IDENTIFY OR SYMPATHIZE WITH?
Coming from a multicultural background, I personally particularly identify with the target to empower the social, economic and political inclusion of all. Next to that, addressing the climate crisis is an issue that lies close to my heart. I spent much time of my childhood outdoors. Whenever I visit the area where I grew up, the noticeable consequences of climate change, particularly in winter, are rather confronting.
WHAT DO YOU SEE AS THE BIGGEST CHALLENGES IN THE FIELD CURRENTLY?
Communication regarding impact investing (and responsible investment in a broader sense) can be rather challenging, due to a lack of common definitions, and the variety of terminology. Clear communication with pension beneficiaries will become even more salient taking into consideration recent legislative and policy developments to grant beneficiaries and clients a say in how their (pension) money is run.
One example is a proposal in the US that aims to restore voting rights from asset managers to their clients. Another example is a recent proposal by a Dutch member of parliament to grant pension beneficiaries advisory powers in relation to the investment of their pension money. In light of such democratization efforts, it will be even more important to be transparent and clear about the necessity, limits and consequences of responsible investment.
It remains to be seen, however, if these initiatives will lead to more ESG-friendly outcomes, as they will also enable beneficiaries/clients to take an anti-ESG stance.
WHAT KIND OF DEVELOPMENTS DO YOU EXPECT TO SEE IN THE IMPACT FIELD IN 2022?
The increasing number of climate litigation cases, and other types of ‘ESG litigation’ is an interesting development. From an investor’s perspective, this trend raises several questions.
Aside from considering how litigation could affect the value-at-risk in a portfolio, it would be interesting to know whether litigation risk will lead to risk-aversive communication, disclosures and behaviour, and what impact this could have on the efficacy of engagement with investee companies.
WHAT IS STILL NEEDED FROM THE IMPACT INVESTING COMMUNITY TO MAINSTREAM IT?
To make the economy more sustainable, we cannot expect the financial sector to solve all problems only with the help of increased disclosure and reporting rules. We need regulation that ensures that prices reflect the true cost of production (a prominent example is a CO2 tax).
