Legal and practical aspects of integrating environmental, social and governance issues into institutional investment
Background and context
The single most effective document for promoting the integration of environmental, social and governance (ESG) issues into institutional investment has arguably been the ‘Freshfields Report’5 published in 2005, which the UNEP FI Asset Management Working Group (AMWG) commissioned to Freshfields Bruckhaus Deringer, a leading international law firm.
Freshfields covered nine jurisdictions (i.e. Australia, Canada, France, Germany, Italy, Japan, Spain, the UK and the US) and concluded that:
‘…integrating ESG considerations into an investment analysis so as to more reliably predict financial performance6 is clearly permissible and is arguably required in all jurisdictions.’
This clear conclusion is routinely cited by practitioners, academics and opinion formers worldwide and has served to clarify the legality behind the consideration of ESG issues with respect to pension funds, insurance company reserves and mutual funds, as well as foundations.
See full Report, in pdf format.
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