European SRI hegemony 'may put off Americans'July 2010
European dominance of the responsible investment sphere may be dissuading some US investment managers from adopting SRI policies, a think tank has suggested.
A study by the Corporate Library, a US-based corporate governance research consultancy, says the fact that European asset managers are among the most prominent advocates of responsible investment is seen as a negative influence in the US.
'To a certain extent, responsible investment may suffer from an image problem in the US,' says the report. US-based managers 'may be in the habit of thinking of themselves as leaders of the world investment community' and therefore are reluctant to be seen as following what they view as a largely European trend.
The report, Wall Street's mental blocks, suggests similar feelings have been generated by the promulgation of the Principles for Responsible Investment by the United Nations, 'which has not always enjoyed popularity across all segments of the US business and financial community'.
UN figures show there are almost as many UK signatories to the PRI as there are from the US (97 versus 111) despite the size difference between the two economies.
Kimberly Gladman, Corporate Library's research and risk analytics director, said that, even though there is a 'strong and increasing' home-grown SRI movement, responsible investment ideas 'are less broadly understood in the United States than in other countries' and that consequently 'there is much [education] that needs to be done on a conceptual level'.
The report outlines ten 'conceptual barriers' to the widespread adoption of responsible investment in the US, including Wall Street's continuing preoccupation with quarterly financial results, and a widespread view in the country that SRI investments offer worse returns than those in the mainstream.
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