Driving better global standards in sustainable investment
FTSE Russell announced the launch of its Stewardship, Transition and Engagement Program for Change (“STEP Change”) on May 30, 2018 with the first STEP Change report.
Growing numbers of asset owners, asset managers and others involved in the investment chain now routinely consider stewardship and sustainability themes as core investment priorities. Around the world, they are taking action to integrate sustainability themes such as climate change into central aspects of their investments and operations.
Especially since the financial crisis, there has been widespread concern about shorttermism in institutional asset management, with investment managers often trying to maximize returns over each quarter, but potentially generating sub-optimal longterm returns as a result.
There is a growing view that insights from environmental, social and governance (ESG) data, the structuring of investment mandates to incentivize a longer-term performance outcome, and strong investor stewardship and engagement with the management of investee companies will collectively help address this potential market failure, and potentially contribute to better long-term risk-adjusted returns.
FTSE Russell has a long-standing commitment to sustainable investment and has been at the forefront of this trend for nearly two decades, since the launch of the FTSE4Good Index Series in 2001. Now the momentum towards sustainability is building amongst investors globally.
What is STEP Change?
A quick look at FTSE Russell’s approach to stewardship, improving disclosure and fostering transparency for the long-term benefit of the market and ultimately the societies we all operate within.
- A short history of Sustainable Investment innovation (infographic)
- FTSE4Good 15 year anniversary report
- 2018 report: STEP Change annual report
- Stewardship event recording : Exploring stewardship and the transition to a sustainable economy (4:01:44)
- Blog: Stewardship and the transition to a sustainable economy
- Webinar: Busting the myths of the green economy transition