press conference on innovative financing for sustainability

The financial industry was being misrepresented by the common view that fiduciary duties, as they related to investment decision-making, were limited by the need to maximize profits, Paul Watchman, a partner with the law firm Freshfields Bruckhaus Deringer, said at a Headquarters press conference today.

Speaking as a member of a four-member panel taking part in a global round table on “Innovative financing for sustainability”, Mr. Deringer said that, according to a report by his firm, on behalf of the United Nations Environment Programme Finance Initiative (UNEP-FI), investment decision-makers in common law and civil law jurisdictions had broad discretion to take environmental, social and governmental considerations into account.  “In fact, we are arguing that they have a duty to do so in certain instances, particularly where it goes to value, but also where there is a consensus among the broad group of beneficiaries.”

Moderating the round table on the responsibilities of institutional investors regarding environmental, social and governance issues was Paul Clements-Hunt, head of UNEP-FI.  Other speakers were James Mahoney, Director of Public Policy, Bank of America; Martin Hancock, Chief Operating Officer of Westpac London and Chairman of the UNEP Finance Initiative Steering Committee; and Monique Barbut, a UNEP director.  The two-day event is taking place at Headquarters.

Ms. Barbut expressed the hope that the approximately 500 banking, insurance and asset-management leaders attending the round table would offer concrete output on the financial-service sector and capital markets and on how they could contribute to sustainable development goals.

Noting that there was a genuine sea change in attitudes within society, as well as in the business community, Mr. Hancock said the gap between stakeholders and financial institutions had narrowed significantly in a short time, and responsible businesses were taking that very seriously.  Corporate responsibility on the environmental, social and governmental aspects was growing, and those issues would be tested.

Responding to a question about the current huge investment flow to China and its consequences on the environment, Mr. Mahoney said Bank of America was part of that investment flow and that it had concerns about environmental issues in China.  “We have begun the process of addressing -– from a reputation standpoint in particular -– aspects of development in China as they affect the environment and other aspects of social issues in China.  They are of concern to us, and we are very aware of them.”

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For information media • not an official record