Introduction

The theme for the academic stream and the Call for Papers was From awareness to impact: Mechanisms of change in responsible investment. In the article, Does ESG pay off financially? distinguished speakers such as Professor Raghavendra Rau, Professor Jean-Pascal Gond and Michael Viehs discuss the need for a new narrative for responsible investment that focuses on a deeper, and more nuanced, understanding of long-term risks and raising the overall standard of markets, rather than a quest for alpha.

In another session, regulators, academics and investors questioned: Is all investing impact investing? and considered all investing produces “positive social and economic outcomes, some less so”, and examples ranged from tax, to infrastructure and green bonds. This wide-ranging discussion highlighted the communication requirements of investors, communication within companies, as well as the need for identifying and using KPIs more strategically. The development of integrated reporting and decoupling quarterly reporting from quarterly earnings reporting came to the fore, as it did in the session on long-term investment. The debate underlined enhanced corporate disclosure, focusing on organisational culture, clarification of fiduciary duty and nurturing the next generation of leaders.

Understanding barriers, approaches and impacts of engagement is important, and the panel agreed that size does not need to be a barrier. All types of investors can carry out successful engagements. The PRI will be publishing guidance for investors engaging on tax. This will include an overview of recent and potential regulatory changes, example questions for beginning and developing dialogue as well as academic research resources.

The value of education was clear in the roundtable examining the barriers to responsible investment. Bobby Lamy, Head of Curriculum Development at the CFA Institute said: “We will be continuing our assessment of ‘ESG Investing’ to identify the competencies involved so as to serve as a basis for our credentialing programs. My experiences at the conference provided great insight into the process.”

A highlight for me was encapsulated by David Wood who said the RI community is caught wrestling with the fundamental tensions between adopting the conventions of financial practice and critiquing, and trying to change, those same conventions.

We look at comparability, challenge established academic evidence and examine the impact of beneficiaries’ attitudes by showcasing the winning papers of the PRI and Sycomore Award for the most outstanding research in responsible investment. The Best Qualitative Paper, Immature or Impossible: Making Environmental, Social and Corporate Governance Issues Calculable for Investors? details an anonymised global fund manager’s frustrations with ESG data and materiality. The research pointed to the need for real ESG integration. The PRI will be publishing a report in the next year providing guidance and case studies on integration, including both quantitative and fundamental approaches, good practice tools and what may be on the horizon.