14 July 2009: The UN Environment Programme Finance Initiative (UNEP FI) Asset Management Working Group, a partnership between UNEP and over 180 financial institutions worldwide, has released a report titled “Fiduciary Responsibility – Legal and Practical Aspects of Integrating Environmental, Social and Governance Issues into Institutional Investment.” The Group of 180 asset managers represents approximately US$2 trillion in assets under management and argue that integrating environmental, social and governance (ESG) considerations into investment decisions is no longer a luxury, but a legal responsibility.

The report underlines how the world’s largest institutional investors, including pension funds, insurance companies, sovereign wealth funds, mutual funds and foundations, have a central role in assisting the transition to a low-carbon and resource-efficient green economy. It also states that professional investment advisors and service providers, such as investment consultants, asset managers and institutional investors may have a far greater legal obligation to incorporate ESG issues into their investment services or face “a very real risk that they will be sued for negligence.” [UNEP press release] [The report]