Leading Research Centre in France on Responsible Investment, Novethic organizes events to push investors to integrate Environmental, Social and Governance (ESG) issues in their practices.
THE PREVIOUS EDITIONS:
THE 2011 EDITION
The 2011 edition brought together over 150 European asset owners to discuss how to evaluate and integrate the financial repercussions of environmental risks, social troubles, or a lack of transparency in governance structures into investment management.
TO WHAT EXTENT ARE INSTITUTIONAL INVESTORS FULLY AWARE OF ESG RISKS?
The study Novethic carried out among institutional investors, with the support of BNP Paribas Investment Partners, whose results were presented at the opening of the session constituted the first element of the response to this question. The second part came from the accounts delivered by representatives of three prestigious financial institutions on their ESG practices: the European Investment Bank on long-term investment, BNP Paribas on risky sectors and KLP on exclusion.
CAN EXTRA-FINANCIAL RATINGS BE USED TO ASSESS ESG RISKS?
Whether carried out by in-house analysts or bought from specialised agencies, extra-financial analysis is an indispensable tool. And yet is it enough to evaluate all the ESG risks? How should it be integrated into the management process to best assess the impacts of the main risks?
DOES THE INTEGRATION OF ESG CRITERIA PROTECT THE REPUTATION OF FINANCIAL INSTITUTIONS?
Depending on their size, activity and shareholder base, financial institutions attach a greater or lesser importance to their corporate image. That said, no business wants to be associated with a financial, environmental or social scandal that would tarnish their reputation and the general integrity of the company. Faced with this reputation risk, turning to the integration of ESG criteria seems on the surface of things to be the ideal remedy, but under what conditions?
China, United States, Africa- water shortage already affects many countries worldwide. The agricultural sector needs ever greater quantities of water and global industries are competing for this increasingly rare and polluted resource. The revocation of mining licences and reduced nuclear energy production are already visible consequences of localised droughts. However despite these statistics, no sector seems to be have implemented any strategies to address this disquieting situation.
RESPONSIBLE INVESTMENT IN ASIA : AN EMERGING PRACTICE
Asian emerging markets offer promising opportunities for European institutional investors. But how can good financial performance be achieved without compromising ethical social and environmental strategies in countries with generally poor governance? What information is available for responsible investors willing to invest in this area?
THE 'ARAB SPRING': HOW DOES IT IMPACT INVESTMENTS?
Within a few months, revolutions in Egypt, Libya and Tunisia turned the political landscape upside down in the region. But what are their economic and financial repercussions in the short and long term? Are improvements in governance and human rights norms in these countries going to encourage investments or rather are new union claims and social activism combined with the current political uncertainty going to cause investors to pull out?
Investors who seek to take ESG into account in their issuer selection process need these businesses to provide information pertaining to their ESG practices in order to evaluate them objectively. Given the lack of confidence in the current ESG reporting framework, how can relations at the company-investor interface be managed and improved? What are the current European regulations? Do the French and German policies concur?
DO WE COUNT THE COST OF RISKS IN THE ENERGY SECTOR?
The increase in fossil fuel and electricity profits seems to hide the cost of several risks. The explosion of the Deepwater Horizon oil rig and then the nuclear disaster at Fukushima have respectively reminded the shareholders of BP and TEPCO that energy companies are not insulated from financial losses. How can these kinds of risks be factored into financial analysis models? Do new risk strategies restore investor confidence in the energy sector?
RISKY SECTORS: EXCLUDE THEM OR FOSTER THEIR RESPONSIBILITY?
Faced with a sector posing multiple ESG risks likely to worry shareholders, many responsible investors exclude it straight off. Other investors choose rather to initiate dialogue with companies to work together towards an improvement of their practices. The respective merits of these divergent strategies were debated as well as an account given on the work of the Extractive Industries Transparency Initiative (EITI).
EXHIBITION PHOTOS: « IN THE HELL OF COPPER » BY NYABA OUEDRAOGO
A photographer from Burkina Faso, Nyaba Ouedraogo produces artistic photographs of the suffering endured by people faced with the social and environmental consequences of our consumerist way of life. The photos from “In the Hell of Copper” were taken in Ghana, one of the main dumping grounds for e-waste from Europe and the United States. These photos show how young Ghaneans poison themselves as they search for precious metals from amongst the thousands of decommissioned computers piled up in rubbish dumps.