GLOBAL - Environmental and social governance- based (ESG) investments are about belief in the concept rather than proof of returns, according to Robert Rubinstein, founder and CEO of TBLI Conference and Consulting.
Speaking at today's TBLI conference, Rubinstein said he used to send out hundreds of reports and academic studies to asset owners and asset managers who asked for proof of outperformance or equal performance by ESG investments, compared to traditional investments, but has since stopped doing so.
"I discovered it had nothing to do with proof, it has everything to do with belief," said Rubinstein. "If you look at how much study was done on sub-prime mortgage research and investment and risk, how much money went into it and how many people - if that report actually exists - read it, you see very clearly this is about belief, it is not about proof. If you don't want to believe then fine, I can give you all the proof you need. The issue is either you do or do not."
"You are the ones that will make it happen if you want to," he said, addressing the investor audience at the 11th TBLI Conference in Amsterdam this morning.
The financial crisis has also been largely perceived as beneficial to the ESG space.
"From my perspective, the financial crisis has been quite positive for ESG," added David Creighton, chief executive of Canada-based Cordiant Capital. "But the initial concern was that people would cut corners."
Michael Jantzi, chief executive at Sustainalytics, also said: "The crisis provided opportunity and there are certainly signs that the responsible investment community is well-positioned, although it hasn't taken the opportunity to its full advantage yet. There was, for example, a concern in the institutional space that the financial crisis would halt the momentum created by the UN Principles for Responsible Investment (UN PRI). But this hasn't happened yet. Instead, we have actually seen the momentum increase since the crisis."
Despite the progress made, Jantzi admitted that ESG integration by pension funds was still a mixed bag, depending on the geography of the fund. "In Europe, the pension community is further ahead than in North America," he said.
The IPE-TBLI Group ESG Awards will be hosted in Amsterdam this evening to recognise practitioners and investors who are active in the ESG market.
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