Mainstreaming responsible investment



PGM is very large investor we have 80 billion 85 billion asset and we invest in all asset categories but we also invest in all parts of the world and from that perspective you could say that we really earn a tiny bit of the fool economy and that means that we really have to take into account the interaction and the effect of any factors also ESG factors only overall economy and the impact on our portfolio we think that it's very consistent with the fiduciary duty and the fiduciary duty says that we have to provide a good and affordable pension but our members have asked us not only to provide them with a good and affordable pension but also with a responsible pension so it's it's it's in the basis in the core of what our members expect from us and we think that is our fiduciary duty to take this into account and to take this seriously and to think about the future world we live in and to think about the impacts that it has on the investment profile for a portfolio we believe that if institutional investors are not looking at environmental social and corporate governance issues particularly from a risk perspective then we're failing our fiduciary duties in other words we believe that it's integral to the fiduciary duty that that we carry that our trustees carry but all stakeholders and the swaddled and of course with climate change the whole the we cannot separate our sectoral or national of continental interests from each other so there are some really big issues and we are rated we and the insurance industry's institutional investors the insurance industry the banks our rate at the forefront of all of us because we are going to deal with developing the new templates for sustainability as the world economy changes with the move towards India above all China there's been the great economic powers of the essentially then the focus of our investments will change and they will pause to us whole a whole range of corporate governance management style issues environmental issues human rights issues labor issues and several issues that we've never even dreamt of so I mean China could be faced with a an increasingly serious shortage of water because of climate change and so it's potential as an economic power me where I'll be sub constrained by the problems that industrialization throughout the whole world has caused in terms of climate change we know it in Brazil the Philippines Indonesia the forestry has been cleared to produce material for biofuels yet there's a moral shortage of food there's a point of view that says we should very heavily invest and buy off biofuels but the bulk as I as far as I can see the bulk of future production for biofuels the danger as it's either going to come from most parts of the world where people aren't already hungry or as in the case of Brazil a cryptid Amazonian rainforest the lungs of the the of the world that have been burnt down bought carbon released into the atmosphere in order to create the agricultural infrastructure to produce their biofuel materials so each action that we make in one area there's a far greater understanding them –'tis that that one action may have a chain effect and the whole global economy and food production of climate as all absolutely and TAM linked with each other and the difficulty is going to be what is the responsibility of investors what is the responsibility of government what what are the responsibilities of intergovernmental organizations and somehow or another we have to try and assess each other through all of us and to maintain the integrity of our own organizations and our fiduciary responsibilities responsibilities while looking after all of our stakeholders because we're all stakeholders and there's much bigger entity I think importantly from a u.s. perspective all of this is work in progress we spent a number of years looking at how to make the market work better how to get better information on on these issues from both companies but also how to get the market handling this information better everyone has to pick up their specific role as to make sure that it fits to the identity of their funds and to what is important for their organization and take their role from that perspective and if we all do it and then we'll end up in a better industry

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