Success increasingly dependent on emerging markets
Institutional investors should implement and publicly report on a responsible investment policy that addresses poverty and development issues according to a new report by Oxfam launched today.
The report, Better Returns in a Better World, explores the role the investment industry could play in tackling poverty and is the result of a two-year initiative with over 80 influential investors across Europe and the United States including Aviva Investors, Crédit Agricole Chevreux, Henderson Global Investors and Calvert Investments.
"Investors have a critical role to play in the fight against poverty. It's not just a question of morals but smart business as their investments are increasingly exposed to emerging markets and the challenges they face," said Barbara Stocking, chief executive of Oxfam Great Britain.
The report identifies a series of barriers to greater investor engagement in poverty reduction including lack of demand and oversight by asset owners, an overwhelming focus on short-term financial performance and lack of transparency in the investment sector as well as the absence of clear agreed standards on poverty and development-related issues.
"The reality is that investors are more likely to take poverty and development issues into account when there is a clear consensus on expectations of companies' behavior. The absence of regulatory or normative frameworks must be overcome if we expect investors to successfully address poverty-related issues in their investment decisions and engagement with companies," said Rory Sullivan, the investor lead on the project and co-author of the report.
The report provides a set of practical recommendations to help investors maximize their contribution to poverty reduction. These include working alongside civil society and other experts to create analytical tools that integrate development issues into their investment analysis, and to take greater ownership responsibility and a more active role in ensuring that companies improve their performance and reporting on poverty, development and other social and environmental impacts.
The report acknowledges that investors can only do so much on their own, and that governments also have a critical role to play, not just in establishing appropriate regulations.
"Governments should show leadership by requiring that all public asset funds including public pension funds consider their impact on reducing poverty," said Helena Viñes Fiestas, co-author of the report and Oxfam lead on the project.
Notes to editors
The workshops carried out as part of the Better Returns in a Better World project examined investors' influence on poverty including access to medicines, living wages in global supply chains, the arms trade, water scarcity, farmland and food security, private equity in developing countries, and transparency, bribery and corruption.
Tricia O'Rourke, +44-1865 472466 or +44-7920 596358.