By Geoffrey on December 17, 2010
Each week Emerging Markets ESG publishes an interview entitled, “Five Questions about SRI.” The interview features a practitioner’s insights about SRI in emerging markets and through Emerging Markets ESG shares this expertise with a wide global audience. The goals of Five Questions about SRI are fourfold:
- To reflect on what SRI in emerging markets means to practitioners;
- To collect a catalogue of examples of SRI in practice in emerging markets;
- To raise awareness about SRI in emerging markets; and
- To enable SRI practitioners in emerging markets to network with peers around the world.
This week’s interview is with Robert Hassler, CEO, oekom research AG, Munich, Germany.
oekom research AG has been active in the responsible investment field since 1993. It is now one of the world’s leading providers of information on the social and environmental performance of companies, sectors and countries. In partnership with institutional investor and financial service providers, oekom research AG develops innovative investment strategies that combine sustainability research with a high rate of return. Its r sustainability research covers bond and equity issuers – companies, countries and supra-national institutions. When evaluating securities, oekom research AG places a strong emphasis on quality, independence and transparency.
Emerging Markets ESG: How would you define socially responsible investment (SRI)?
Robert Haßler: SRI is the systematic integration of environmental, social and ethical aspects into investment decisions in order to add the responsibility dimension into the whole decision making process.
Emerging Markets ESG: What distinguishes SRI from mainstream investment?
Robert Haßler: Mainstream investors do not systematically integrate ESG issues. They may take into account single areas where the materiality of certain ESG criteria is obvious, but they do it primarily in order to improve the risk and return ratio of their investments, whereas the approach of SRI investors is, to systematically integrate the responsibility and sustainability dimension into the whole decision making process.
Emerging Markets ESG: Which extra-financial theme – environmental, social or governance – is the most challenging for companies in emerging markets to manage?
Robert Haßler: With regard to the very broad regional spectrum of emerging markets it is not easy to highlight the most challenging aspect of course. But if I have to concentrate on some selected issues, which are really relevant, I would highlight the issues of labor rights, corruption and basic environmental standards.
Emerging Markets ESG: Which extra-financial theme – environmental, social or governance – is the most challenging for investors in emerging markets to analyze?
Robert Haßler: I would like to focus the question on the aspect of company independent information sources as a very crucial part of the ESG company analysis. In order to assess the compliance of certain standards especially in the environmental and the social dimension, company independent information sources such as NGOs, scientific institutions or media play a important role. Especially in Asia it is often hard to find a sufficient number of partners, which provide reliable information in these areas.
Emerging Markets ESG: Various data providers document a significant growth in SRI in continental Europe over the past decade. Are continental European institutional investors interested in SRI products in emerging markets?
Robert Haßler: Yes, absolutely. We see a growing demand from European SRI investors to invest in emerging markets. Due to this demand we have enlarged our research universe in order to cover the MSCI Emerging Markets completely.