FUTURE PROOF?
Embedding environmental, social and governance issuesin investment markets
Outcomes of theWho Cares Wins Initiative2004–2008
FUTURE PROOF?
Embedding environmental, social andgovernance issues in investment marketsOutcomes o the Who Cares Wins Initiative2004–2008
Foreword by the sponsoring institutions
Who Cares Wins was launched in early 2004 as a joint initiative o the inancial industry andthe UN Global Compact, International Finance Corporation (IFC) and the Swiss Government.The aim was to support the inancial industry’s eorts to integrate environmental, social andgovernance (ESG) issues into mainstream investment decision-making and ownership practicesthrough a series o high-level meetings with investment proessionals.At the heart o the Initiative lay the conviction that increased consideration o environmental,social and governance issues will ultimately lead to better investment decisions, create strongerand more resilient inancial markets, and contribute to the sustainable development o societies.The recent economic downturn has revealed the devastating eects o miscalculations. It hasreinorced the necessity or the inancial industry to more diligently manage their risks, includingthose related to environmental, social and governance issues. Among those is climate change,considered one o the most serious threats the global economy will have to ace in the nextcentury. A inancial system that is too short-sighted and unaware o the dynamics o climate im-pacts will ail to avoid or reduce the risks posed by a climate-induced economic crisis that couldeasily be ar greater than the credit-related crash o 2007–2008.The positive message rom the inal report o this Initiative is that the industry has come a longway since 2004 in understanding the issues and developing the methodologies and tools or ESGintegration. However it is clear that widespread implementation o these methodologies andtools has yet to occur throughout the inancial industry, and will only be possible with the col-laboration o all inancial market actors.Going orward, the engagement o asset owners and regulators is particularly sought to helpcreate much-needed enabling rameworks and market demand or ESG-inclusive investments.Intelligent regulation is a necessary component o the growth o sustainable capital lows,which implies regulation that requires greater transparency on ESG integration rom companiesand investors and relies on markets to apply the most appropriate ESG integration strategies.Implementation should also be driven by strong public-private partnerships, voluntary initiativesand principles-based approaches. Principles can oer both investors and companies guidancewhere legislation is lacking, and the chance to beneit rom ‘virtuous circles’ o ESG leadership.The Who Cares Wins Initiative is drawing to a close, but our dialogue and engagement withthe inancial industry continues unabated through other orums. We believe that this continuedengagement will be particularly important or investments in emerging markets, where ESGintegration is still an exception.We strongly believe that better integration o ESG issues into investment markets is withinreach, leading to more resilient and eicient markets and contributing to a more sustainable de-velopment o societies. IFC, the Swiss Government and the UN Global Compact urge all actors3
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Goals and chronology of the WCW Initiative for Outcomes of the Who Cares Wins Initiative 2004-2008 (January 2009)
On January 28, 2009, IFC released the final report of the Who Cares Wins initiative. The Who Cares Wins 2008 report details the progress that has been made to increase the volume of capital that uses…
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