BSR Insight Articles About Financial Services
Generating and Protecting Value Through Sustainability: Five Lessons From Private Equity
David Korngold, Manager, Advisory Services
Even though credible sustainability initiatives serve as an engine of value creation, there are still critics who claim such efforts are more about public relations. Yet several prominent private equity firms—known for their rigorous focus on producing returns for investors—are emerging as sustainability leaders, particularly when it comes to integrating sustainability into investment decisions and management. Read more
ESG Reporting in Private Equity
Charlotte Bancilhon, Associate, Advisory Services
Investors and stakeholders are demanding greater transparency and accountability from the private equity sector. The global economic crisis and the 2012 U.S. presidential election have stirred up a public debate on the economic and social impacts of the private equity industry, most notably on job creation. Meanwhile, limited partners and other investors want better disclosure of financial and extra-financial risks. BSR believes the private equity sector should respond to these demands by defining a robust and proactive approach to environmental, social, and governance (ESG) reporting and by being more transparent about how it contributes to social and economic welfare. Our new report, which describes the public reporting practices of the top 20 U.S. and European firms, found that proactive ESG reporting to investors and the public at large is still emerging. BSR provides recommendations to fund managers on ESG reporting in private equity, such as using materiality assessments to integrate the most salient issues into reports, disclosing ESG management objectives and performance results, and developing tailored approaches to reporting to limited partners. Read more
Four Ways to Attract Long-Term Investors
Laura Commike Gitman, Managing Director, Advisory Services, BSR, and Hélène Roy, Intern, BSR
In 2011, the California Public Employees' Retirement System (CalPERS) adopted a "total fund" approach to sustainable investment, through which it committed to integrate the analysis of its portfolio companies' environmental, social, and governance (ESG) performance into all of its investment strategies. Like other pension funds or foundations, CalPERS has long-term liabilities and a fiduciary duty to its members, which, for CalPERS, is set out in California's constitution. By taking a wider perspective and by incorporating ESG criteria into its investment-decision process, CalPERS believes it can increase the financial performance of its portfolio and better achieve the long-term, risk-adjusted returns on which its members rely. For CalPERS' portfolio companies, this means their ESG performance is under greater scrutiny. For example, the pension fund will pay particular attention to a company's governance structure because poor governance often translates into poor decision-making and a decline in shareholder value. In another example, CalPERS will closely monitor emerging-market companies to ensure no infringement of social and human rights principles. CalPERS, with its focus on ESG integration, is not alone among mainstream investors—even in today's relentlessly short-term-focused economy. As evidenced by the growing number of UN Principles for Responsible Investment (UN PRI) signatories, asset owners and investment managers are embracing sustainable investing. As of June 2012, the 1,100 UN PRI signatories collectively represented US$32 trillion of asset under management, or 25 percent of the world's total financial assets. Two key drivers are leading this trend: Read more
Giving Business a Role in Reducing Carbon Emissions
Julia Robinson, Communications Associate
Government pledges and roadmaps might reduce global greenhouse gas emissions by 3 to 6 gigatons, but a significant gap—around 6 to 9 gigatons—remains to keep global warming below 2°C by 2020, which is the accepted threshold to avoid high-risk climate change. Read more
How Wireless Technology Can Support Social Impact
Marshall Chase, Associate Director, Advisory Services
A new report by BSR and CTIA--the Wireless Association explores opportunities to use wireless services to support health care, financial inclusion, education, and community empowerment. Some of these opportunities include: * Mobile health: Health care workers can reach underserved areas by coordinating medical services, predicting disease outbreaks, and connecting patients to doctors. * Mobile finance: Mobile applications improve access to financial services for many of the 60 million unbanked and under-banked people in the United States and to billions more who live around the world. * Mobile education: Wireless applications encourage "anytime, anywhere" interactive learning. * Community empowerment: Wireless services can increase people's ability to connect with each other, their governments, and other institutions in effective ways. The report also explores the industry's challenges, including ensuring ethical supply chain labor, addressing concerns about privacy and freedom of expression, and providing consumer education about the opportunities and risks of using wireless services. Read more
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