"Consensus is needed on which social issues the financial industry requires to prioritize", Michael highlighted. He emphasized that the EU may pave the wave, but it shall not dictate the agenda. Two main challenges must be tackled down the road: there needs to be agreement on specific metrics and wide-spread global standards must emerge.
Financial institutions play an influential role which comes with great responsibility to engage with policymakers on the screening of the proper implementation across the value chain of those standards.
Kees defended that a focus on human rights can fundamentally change asset allocation and investment decisions. He encourages to move from an exclusive risk lens to a contribution perspective via boosting activities that benefit essential human needs across the horizontal stakeholders spectrum of clients, workers and communities.
Margarita underlined the long-lasting impact of social issues on share price. To do so, she pointed out a myriad of examples from bad press to boycott campaigns connected to social concerns. The resulting reputational damage highlights how social issues also have a direct impact on the financial performance of firms.
The 3 speakers discussed about the tension between divesting from a company with social underperformance versus staying engaged and committed to help the investee to change from the inside. This dilemma is intertwined, the experts agreed, with the governmental approach to the 'S', which needs to balance punishments (social tax on imports was brainstormed as example) with carrots in the form of public disbursements supporting social endeavors that gradually pushes the S-bar upwards.
This sustainability webinar was the second in the series. Would you like to respond, or should you have any questions? We would be pleased to hear from you. Please feel welcome to e-mail Stephen Ivan aan den Toorn, DUFAS policy advisor sustainability.