GLOBAL - Global business leaders do not believe institutional investors can drive the corporate responsibility agenda and claim they must do more to create a sustainable economy.
According to research conducted by the UN Global Compact and Accenture that was released by the United Nations Principles for Responsible Investment (UNPRI), 86% of chief executives want investors to better price sustainability into valuations if the issue is to become embedded in core business strategies.
The findings follow four years of initiatives by the UNPRI designed to encourage investors to include environmental, social and governance policies in their investment strategies.
Donald McDonald, chair of the UNPRI initiative, said institutional investors were aware of the importance of strong corporate governance in driving positive performance, but argued the next decade would be "an age of responsibility for the capital markets".
"If a company has poor corporate governance or persists with bad environmental management, then it can, and should, affect the long‐term valuation of the company," he said.
"The truth is, that's still a relatively new concept for many investors, but there are now leaders in mainstream markets that have developed the tools and models to integrate sustainability and who can push the global capital markets beyond the tipping point on sustainability."
More than 750 chief executives aired their views at a summit held by UN Global Compact, an organisation made up of UN agencies, labour, civil society and governments focusing on human rights, labour, environment and anti‐corruption.
Gavin Power, deputy director of UN Global Compact, argued there was desire among investors to create a sustainable economy, highlighting the $20trn (€16trn) of assets already signed to the UNPRI.
"That sends a powerful message to the corporate world that the will is there from the investment community to build more sustainable capital markets," he said.
"Companies and investors must now work together to identify and overcome the barriers that prevent sustainability from being permanently embedded into the majority of global business activity."