PRI chair says credit crunch may be ‘catalyst’ for more sustainable markets

Donald MacDonald, chairman of the United Nations Principles for Responsible Investment, says the current credit crisis could be the catalyst for a switch to more sustainable market practices that benefit investors and society at large. As evidence, MacDonald pointed to the huge rise in the number of investors joining the PRI, despite the market turmoil, which many observers believed could test investor commitment to responsible principles. The initiative recently signed its 400th global institutional member and now represents $15 trillion in assets. In the year since the start of the credit crisis, the number of institutions signing the PRI has grown by 65%, and the rate of growth since the start of 2008 has continued at 37%.
MacDonald said: “I think the increasing support for the PRI shows that investors in general have taken a long hard look at the credit crunch, and some of the practices that caused it, and decided they can benefit from more comprehensive analysis of investment risk, one which incorporates environmental, social and governance issues into decision-making and ownership practices. The tough environment for investors has increasedinterest in responsible investment as a driver of long-term value.” The PRI initiative believes that one of the positive effects of the global credit crisis has been to convince an increasing number of mainstream investors of the value of taking factors such as climate change, environmental and social disclosure and corporate governance into account when making their investment decisions and exercising their ownership obligations.
Roland van den Brink, chairman of Stichting OPF, the company pension fund of Mn Services, the Dutch pension fund manager, which recently became the 400th signatory to the PRI, said: “The current volatile financial climate only makes it more important that our investments support the sustainable development of societies. We believe this is the only way to ensure good long-term results. Signing the UN PRI gives us an opportunity to be responsible asset owners, not in splendid isolation, but in a joint effort with other asset owners. We hope this joint effort will eventually lead to more sustainable financial markets, both to the benefit of our pension fund and to the benefit of society.”