Industry superannuation fund Cbus has signed an international statement calling on investors to develop and adhere to environmental, social and governance (ESG) frameworks.
The Global Statement on Investor Obligations and Duties, launched in Paris this week, is based on the work of a number of international organisations, including the United Nations, and is intended to rectify the lack of “globally consistent mechanisms for investors to take account of ESG issues”.
Policymakers globally have not established clear obligations for investors, according to the statement, and more needs to be done to ensure positive ESG action.
“This clarification would provide national governments with the confidence to act, knowing that other countries were also taking action,” it said.
The statement added that “despite significant progress, many investors had yet to fully integrate ESG issues into their investment decision-making processes.”
Cbus Super chief executive David Atkin said companies needed to be mindful of their ESG practices if they wanted to “provide strong, sustainable returns”.
“We take the view, as do many Australian and international investors, that environmental, social and governance practices are critical components to long-term stability and success in business and investing,” he said.
Mr Atkin added that policymakers should “clarify investors’ obligations” on both a national and international level.
“The global integration of the economy and the global profile of investment portfolios calls out the need to clarify obligations and duties in integrating ESG into investment practices,” Mr Atkin said.