RI Trends for 2019
In this issue of the Expresso, we are humbled to share our "good works" with a copy of the 2018 Heartland Impact Report. We're thankful for the support of our Governing Board, friends and sponsors who have helped drive the responsible investment movement. We hope to multiply these efforts in 2019 with a renewed fervor.
Responsible investing is not a new concept in the U.S. Dating back to the 1920's, labor banks (Amalgamated) and worker-friendly insurance programs (Ullico) were fighting to ensure human rights and financial security for existing workers and new immigrants. The 2006 launch of the UN Principles of Responsible Investment (PRI), backed by unions, standardized non-financial environmental, social and governance (ESG) investment criteria for global investors, including pension funds. U.S. DOL 2015 reconfirmed that pension investments can invest responsibly, and that includes investments in the "real economy" - approaches that have empowered more positive economic development, sustainable environmental practices, and good employment/labor practices.
Flashing forward to 2018, the US SIF estimated that $12 trillion in U.S. assets were being managed using socially responsible criteria. These developments are driving investor choices around a host of issues, including climate and "just transition," diversity and the #METOO movement, human capital and income inequality, and information privacy. We're especially excited to see proposals from Senators Warren and Baldwin (and their colleagues) toward more participatory Euro governance practices that include workers sitting on corporation boards. We are closely watching these issues daily, and we hope to better understand in 2019 how we can make our voices heard.
As responsible investing continues mainstreaming, there are several trends to watch for in 2019:
A greater demand for transparency. Companies will be called out to produce evidence of their internal practices and impact on society.
A need for trusted resources. Investors want to know they're investing positively, but where do they turn for validation and information? Whether it's Heartland, US SIF or UN-PRI, everyone will be looking for a reliable source.
ESG interest will expand. A recent article from Investopedia highlighting the top investing terms for 2019 notes the impact of ESG investing will continue to trend upward as Millennials and Gen Xers become the drivers behind investment decisions incorporating their values.
The US SIF has released their Report on US Sustainable, Responsible and Impact Investing Trends for 2018. They also encouraged by the increasing interest in investing for a positive impact. A copy of the Executive Summary is available here.