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The Rise of Considerate Capitalism

13/02/2018

Fund managers are increasingly being asked to play a role in ensuring good corporate behaviour, but strong environmental, social and governance (ESG) analysis is a crucial part of delivering shareholder returns, say Rupert Krefting, head of corporate finance and stewardship at M&G.

Companies are coming under increasing scrutiny from governments and regulators not just for the returns they deliver to shareholders, but for the way those returns are generated. Increasingly, investors see both the risks in poor governance and the opportunities presented from solving long-term structural problems around the globe, such as climate change.

Rupert Krefting, head of corporate finance and stewardship, leads this charge at M&G, holding companies to account and helping the group's fund managers make better investment decisions. At M&G this is what we call responsible investing.

Impact investing, ethical investing, ESG investing - the concept comes with many names and acronyms. Krefting defines it as all the 'non-financial' aspects of a company's operations, those elements that can't be seen on the balance sheet or profit and loss statement.

Krefting believes strong analysis of environmental, social and governance criteria is likely to be crucial in delivering returns for active shareholders in the future.

The value of investments will fluctuate, which will cause fund prices to fall as well as rise and you may not get back the original amount you invested.

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The value of the fund's assets will go down as well as up. This will cause the value of your investment to fall as well as rise and you may get back less than you originally invested.
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