Looking at the positives
In 2004, the United Nations and the World Bank's International Finance Corporation (IFC) launched a pamphlet called "Who cares, wins" to provide systematic guidance for financial players on how to better integrate ESG, for example, environmental, population and governance issues, into their decision-making processes. The underlying idea was that the most effective way to improve the world is to require that regulated financial players are made accountable, rather than requiring it from companies without any legal or regulatory constraints.
The pamphlet started a global transformation: today, virtually all financial players, and increasingly, large and smaller companies, understand their role in relation to sustainability and ESG issues. The most advanced among them seek not only risk management, but also business benefits from this responsibility, which are increasingly found in the modern world.
The EU, the UN and the UN PRI [Principles for Responsible Investment] for a better world
Ten years on, in 2015, the UN published the ambitious Sustainable Development Goals: 17 goals and 169 sub-goals that the EU should achieve by 2030. By exploring these, organisations are finding ways to link to large-scale world improvement.
And continuing today the EU is not standing still: it has set up a Sustainability Reporting Directive (SFDR) for financiers, and is working on a Corporate Sustainability Reporting Directive (CSRD) that will enter into force in the coming years. Every board and management team needs to understand what CSR requires of an organisation today. Voland's views on how to increase business value through ESG can be found in this blog.
Voland is a signatory to the UN PRI
Voland Partners is a growth fund under EU-SFDR Article 8 and is also a signatory to the UN PRI. The UN PRI is the world's largest advocate for responsible investment, working to promote ESG issues, influencing investment markets and, ultimately, improving the state of the world.
The UN PRI treaties that signatories pledge to observe may be simple, but following them will ultimately have a measurable impact. Every investment must be responsible, and the analysis of that responsibility must be transparent. Alongside this, signatories must pledge to work together for a better future.
Where there's a will...
The various sustainability frameworks may seem like a complex mess of acronyms as they have emerged from many places at the same time, and have been promoted by a number of global players. However, efforts are being made to simplify procedures such as the IFRS Sustainability project, in order to consolidate the principles of responsibility reporting.
It will require commitment from the organisations in order to understand which areas of responsibility are required, and within what timeframe. Yet, this is by no means an insurmountable challenge. Ultimately, it is will that matters: everyone must understand the impact of their actions and takes responsibility for them. All of us – people AND organisations – have an impact on the environment, population and society. We decide whether such impact is negative or whether our actions can create a cleaner planet, happier working lives and people, and ultimately a more sustainable world.