Twenty major investment companies – including Banco do Brasil, Credit Suisse Group, Deutsche Bank, Goldman Sachs, HSBC and Morgan Stanley – have endorsed a Global Compact report and initiative on "connecting financial markets" to environmental, social and governance criteria, and agreed on steps to bring other actors in the financial world into accord on how these factors would become standard components in the analysis of corporate performance and investment decision-making. The 20 companies control $6 trillion in assets.
The report, entitled "Who Cares Wins", was issued today at a summit meeting of the Global Compact. Anthony Ling, a managing director at Goldman Sachs, presented the report and the initiative at the Summit.
"Mainstream investment houses are increasingly coming to the conclusion that analyzing companies’ polices related to social and environmental issues must be central in their work since such commitments are fundamental in terms of risk management", said Gavin Power, a senior advisor at the Global Compact. "This report represents a major sea change in approach vis-à-vis the financial community".
A complementary report is also issued today by the UN Environment Programme’s Finance Initiative, which contains 11 case studies of work in this field by investment companies.
Also at the 24 June Global Compact Leaders Summit, there was an announcement of an agreement by ten world stock exchanges to explore modes of cooperation with the Compact, including actively share information on the Global Compact with their listed companies. The ten exchanges carry a combined market capitalization of $3 trillion. They are: Bovespa, Deutsche Borse, Euronext, Italian Exchange, Luxembourg Stock Exchange, the Irish Stock Exchange, Istanbul Stock Exchange, Jakarta Stock Exchange, Johannesburg Stock Exchange, and the Toronto Stock Exchange.
In addition, the Brazilian stock exchange Bovespa and the Jakarta Stock Exchange officially announced their decisions to join the Global Compact, becoming the first two stock exchanges to do so. Participation in the Global Compact entails adhering to and promoting universally agreed UN principles in company practice.
Since the first Global Compact summit in June 2000, the number of firms participating in the Compact has risen from slightly over 50 to more than 1,500. International civil society and labour organizations are represented as well.