Oxfam: investors need to look at poverty in emerging markets or risk backlash

NGO says water availability and community relations could be flashpoints.

Oxfam, the international development NGO, says institutional investors need to look at poverty and development issues as they increase allocations to developing countries or face increasing risk of conflict with local populations and brand reputation for themselves and the companies they invest in. The NGO has spent the last two years talking with institutional investors on topical questions such as farmland investment, labour standards and climate change as part of its Better Returns in a Better World project. In a concluding report, Oxfam said the current chase by investors for returns in emerging markets could backfire if they are unaware of the risks of not looking at development issues. It said investors could face higher costs for commodities such as water or for better relationships with local communities if they were not engaged in questions of equitable infrastructuredevelopment or poverty relief. It said governments should require pension funds by law to have a policy on responsible investment, publish how they implement their policy, and report regularly on its social, environmental and financial outcomes. Governments should also make responsible investment an integral part of any state-run pension funds or sovereign wealth funds, said Oxfam. The report said investors should, in turn, address poverty and development issues within their overall approaches to responsible investment. Jeremy Hobbs, executive director of Oxfam International, said: “We will continue to engage with the investment community as it is our belief that, not only do investors face a moral obligation to take action on poverty, but there is also a compelling long-term commercial case for them to do so.”
Link to Oxfam report