Finally, some highlights from the Internatinal Responsible Investment conference that took place a few weeks ago in Melbourne.
Organised by Responsible Investment Association Australasia (RIAA) and my dear friend Louise O’Halloran, its Executive Director, it mobilised the “responsible investment” community at a time of unprecedented crisis in the financial markets – and produced some interesting and challenging thinking.
I’m a big fan of Donald MacDonald, Trustee of the BT Pension Scheme, who may not be “an economist or a financial or investment expert”, but who as “a pensioner and member nominated trustee of a large defined benefit pension scheme” understands the issues like no one else and who offers candid views on the mess we currently find ourselves in.
He reminds us that “one or two people in the RI movement, did, it is said, see the crisis looming, but I think we, as representatives of pension funds, foundations, insurers, asset managers and specialist advisors, have to ask ourselves this; why didn’t we see it coming, in a much more clear manner?
[...] So while we in the Responsible Investment community may express some self righteous indignation at the breakdown of trust and transparency in the financial sector, it does occur to me, that, as shareowners in that sector, as clients of hedge funds, auditors and accountants, as stock lenders, perhaps we, at the head of the investment chain, may have missed some of our own responsibilities in the stewardship and governance area.”
Whilst he rightly questions the RI industry and its ability to have foreseen the crisis (and helped prevent it), he also makes it clear that now is the time to provide leadership and to reaffirms the RI community’s commitment to investing “with a long-term horizon”.
The rest of his speech is worth a read because it offers some lessons from the current crisis. It also reminds us that our success will depend on our ability to develop holistic approaches to tackle interconnected challenges such as climate change, food security and eco-system balance. This is something we tend to lose sight of at a time of short-term panic-driven thinking.
Businesses clearly have a wider and increasingly important role to face up to. In our work on the RSA’s Tomorrow’s Investor project, we are interested in the role investors (particularly those with pensions) can play in helping them do so, and welcome any comments or suggestions.