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Page 2 - ESG to be one of six major investment trends in next five years: Watson Wyatt
Similarly, the reports strongly criticises the sub-prime crisis as a ‘systemic issue’ based on a vicious circle of short-termism, disintermediation of product sellers from risk and flawed and excessive incentive structures that pushed market participants to “ensure the system remains prone to periodic crises”. The report says: “The problem resides in excessive competition, complexity and compensation.”
It said investment borrowing or ‘leverage’ had also become the “master as opposed to the servant” for investors because of over competition for 10%+ returns. Another major trend observed by the report is increasing concern amongst investment professionals that defined contribution (DC) pension plans will not be able to meet future pension payments without radical transformation.
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