Different Rules, Same Goals: The Glocalization of Sustainable Investment Strategies
The first-ever sustainable and responsible investment global trends report will be released in December
Nothing exists in a vacuum (except space). Unlike neighbors who can build walls or fences between them, we can't fence off the heavily polluting European Union (14 percent of the global total CO2 emissions, 3rd place) or the United States (18 percent of the total; 2nd place) or China (23 percent of the total, 1st place), from the rest of world. To be sure, many national environmental policies and habits affect other nations, to varying degrees.
But looking at a nation's total carbon emissions doesn't tell the whole story. As a 2009 Guardian Datablog notes, per capita carbon emissions is a more useful measurement. The average American is responsible for 19.8 tonnes of CO2 per year, while the average Chinese citizen only produces 4.6 tonnes. The average Kenyan emits a mere 0.3 tonnes of carbon dioxide annually. When it comes to anthropogenic climate change, the developing world will pay for the developed world's massive carbon footprint. Put another way, the world's poor will bear the brunt of rich peoples' excessive and irresponsible lifestyles.
A BETTER SUSTAINABLE INVESTMENT: THINK GLOBAL, ACT LOCAL
Indeed, knowing what happens on a local and even individual scale is critical not only for understanding the bigger picture, but also for determining local, regional and international policy and sustainable investment strategies.
Investors around the world are increasingly interested in making ethical investments, but as differences in governmental regulations tend to keep information regional, it's hard to get a view of global trends. But thanks to a recent agreement by several of the world's biggest sustainable investment membership organizations, that global view is on the horizon with a first-ever trends report, to be released in December 2012. Most importantly, the report is being built on regional information.
"The SIFs across the world traditionally are the local foothold of sustainable investors," said Guiseppe Van Der Helm, president of the European Sustainable Investment Forum (Eurosif), and executive director of the Dutch Association of Investors for Sustainable Development (VBDO). "Sharing our experience in advancing sustainable investment will enhance our global thought leadership."
APPROACHING THE AMORPHOUS: HOW TO GLOBALIZE LOCAL KNOWLEDGE
In their book Enabling Knowledge Creation: How to Unlock the Mystery of Tacit Knowledge and Release the Power of Innovation, George Von Krogh, Kazuo Ichijo, Ikujiro Nonaka and Ikujiro Nonaka stress the importance of "microcommunities of knowledge, the small groups within an organization whose members share what they know as well as common values and goals." The authors call for moving "beyond the current limitations of knowledge-management theory," to uncover "practical approaches to the amorphous, constantly evolving, human realm of knowledge." This concept can be translated to groups of organizations with similar goals, or even nations, and the new global sustainable finance trends report may prove to be a prime example.
In addition to Eurosif and VBDO, the groups involved in this new report include the Forum for Sustainable and Responsible Investment (US SIF), the UK Sustainable Investment and Finance Association (UKSIF), the Canadian Social Investment Organization (SIO), the Responsible Investment Association Australasia (RIAA), the Association for Sustainable & Responsible Investment in Asia (ASrIA) and the Africa Sustainable Investment Forum Project (AfricaSIF).
For over a decade, these regional bodies have produced reports covering the sustainable and responsible investing trends within their own regional and local markets. The release of the first global sustainable investment "Trends 2012" report marks the first time these groups have joined forces to produce a unified body of regional-based knowledge. Together, these organizations represent more than 1,000 members, including NGOs, banks, pension funds, asset managers, financial advisors, community development organizations, research institutions and impact investors.
FROM PUBLIC EQUITIES TO MICROFINANCE: ASSESSING STRATEGIES ACROSS JURISDICTIONS
The report "will document the types of investors involved, break down the strategies employed and make international market comparisons," according to a US SIF press release. "It will cover all asset classes, from public equities and fixed income to hedge funds and microfinance. ESG investment strategies such as screening, integration and engagement will be assessed across jurisdictions."
"The enduring strength of sustainable investment organizations is that we are driven by what's needed on the ground in our regions and guided by the deep expertise of our members," said Louise O'Halloran, the executive director of Responsible Investment Association Australasia. "Bringing that expertise together as a global force is an incredibly powerful benefit for our community of members around the world."
In his foreword to the 1999 United Nations Development Programme report "Global Public Goods," UNDP administrator James Gustave Speth called for "a new form of international cooperation that embraces trade, debt, investment, financial flows and technology, and that includes payments and incentives to countries to ensure an adequate supply of global public goods." It's been a long time coming, but the new Trends 2012 report is finally answering that call. In addition to being an important addition to the current global sustainable investment knowledge base, it will likely provide useful strategies that will help achieve the goals that will be set forth at Rio+20 in June.
The Guardian. Carbon emissions per person, by country. September 2, 2009. Accessed April 12, 2012.
US SIF: The Forum for Sustainable and Responsible Investment. Global Collaboration on Sustainable Investment Advances as Leadership of Sustainable Investment Organizations Meet in London. April 2, 2012. Accessed April 7, 2012.
Von Krogh, George, Kazuo Ichijo, Ikujiro Nonaka and Ikujiro Nonaka. Enabling knowledge creation: how to unlock the mystery of tacit knowledge and release the power of innovation. New York: Oxford University Press, 2000. p. 5.
United Nations Development Programme. Global Public Goods: International Cooperation in the 21st Century. New York: Oxford University Press, 1999. Accessed April 12, 2012.
image: San Jose, California, stereographic projection (credit: Steve Dorsey, Flickr Creative Commons)