Handbook on responsible investment across asset classesApril 2008
Boston College Center for Corporate Citizenship.
96 pages. Free download at www.bcccc.net
A number of overviews of responsible investment have appeared over the years, but this handbook stands out for its quality. Apart from the usual fare of bonds, equities and real estate, it also considers more exotic instruments such as commodities and hedge funds, which ethical investors have barely begun to explore.
The handbook is aimed primarily at institutional investors, although wealthy individuals, financial advisers and asset managers will find much of interest. It explains how to implement investment strategies across asset classes and investment styles. Most of the examples and discussion relate to the North American and European markets, with five pages devoted to emerging markets. No mention of Japan is made.
There is much insightful detail here. I did not know, for example, that US mission-based institutional investors have negotiated deposits with banks on condition that branches in poor areas are kept open.
The sections on investment strategy are among the most interesting. Should ethical investors, for example, short stock? In doing so, they miss opportunities for engagement, but equally could benefit from a short position in a company with sound credentials.
No responsible commodities investment products yet exist, but the authors note their huge potential. Carbon trading points the way. Commodities markets could price the environmental effects of natural resources or risks associated with food production, and investors trade in low-impact commodities. A practical handbook, then – and a forward-looking one.
Already a member? click here to login