In the closing session of day one of Schroders’ flagship investment conference for clients in the Asia Pacific region#, Ella Reilly, Sustainability Manager, Schroders, moderated a discussion with the event’s keynote speaker Paul Polman, Vice-Chair of the UN Global Compact, former CEO of Unilever and Co-Founder of IMAGINE^, who shared his views on how the private sector can play a pivotal role in accelerating progress to tackle the critical challenges facing people and the planet, including the race to net #Zero emissions, and what investors can do to drive and participate in this journey.
Paul noted that climate change and inequality are the two biggest sustainability challenges we face today, and it is in the interest of the business community to step-up and tackle these issues.
Paul Polman, Vice-Chair of the UN Global Compact, former CEO of Unilever and Co-Founder of IMAGINE, commented:
“Climate change and inequality are significant global challenges, but I think 2020 and the Covid-19 pandemic has raised awareness of what needs to be done. People have realised that the cost of not addressing these issues is now significantly higher than the cost of taking action, which makes it a financially attractive proposition.
“I believe it is time to reinvent our economic growth model, one that not only takes profit maximisation into account, but also the planet and people. It could bring a stronger development for the world as a whole and chart a new route to sustainability and rising living standards for all. When I was working on developing the 17 Sustainable Development Goals as a member of the UN Secretary General’s High-Level Panel, we found that there was an opportunity to unlock US$12 trillion dollars of economic value and 380 million jobs over the next decade if we achieved these goals. This is a huge business opportunity.
As a pioneer for sustainability in business, Paul shared his perspectives on why a purpose-driven approach can build more successful businesses, and what the investment industry can do to help accelerate thinking on sustainability.
“It is important that businesses step up and put purpose at the core. Companies that understand that and put purpose at the middle of their business models will do better, have more engaged employees, have better connections with their communities and people in their value chains, and can be more innovative. Ultimately, that translates into better overall results. If we look at the Russell 5000 index, these companies outperformed their sectors over the last four years and during the pandemic have had double-digit margins compared to their benchmarks.
“The investment industry also plays a crucial role. Today, everywhere we look points to this green recovery being more cost efficient, able to generate higher returns, and provide more resilient jobs. Many asset managers are now holding companies to a higher standard in terms of social and environmental behaviour. Investors are also increasingly recognising that companies with strong ESG performance deserve a premium valuation to their share price, and companies that prioritise ESG initiatives represent better opportunities for long term returns.
“From an investment perspective, one important thing that investors should do is align their portfolios with the Paris Agreement and decarbonise their portfolios. I also think putting nature higher on the investment agenda could present interesting opportunities.
#On 29 and 30 June 2021, Schroders engaged financial industry professionals and business leaders at its flagship investment conference for clients across Asia Pacific to discuss the potential levers investors can pull to drive sustainable investments in #TheZero environment – whether it is in the interest rate policy, return on traditional income investments, the rising urgency to reach net zero emissions, or in a world where zero action means zero results.
A diverse line-up of thought leaders discussed a range of topics, from the role that policy makers and investment managers play, to exploring new investment themes and solutions that have opened up for investors in the dynamic age of #TheZero, with a particular focus on private markets, income investing, China, thematic investing, energy transition and climate change.
^Under Paul Polman’s decade-long leadership, Unilever succeeded at meeting the goals set out in its Sustainable Living Plan, which aimed to double its growth while reducing its environmental impact by half and tripling its social impact. He has since founded IMAGINE, a social venture focused on accelerating business leadership across a range of industries to achieve the UN’s Sustainable Development Goals (SDGs). This is reflective of Paul’s leadership in the UN, including his role as member of the UN Secretary General’s High-level Panel that developed the SDGs and vice-chair of the UN Global Compact.
Important information
The views and opinions contained herein are those of Schroders’ investment teams and/or Economics Group, and do not necessarily represent Schroder Investment Management North America Inc.’s house views. These views are subject to change. This information is intended to be for information purposes only and it is not intended as promotional material in any respect.