SRI in the Rockies: What will SRI and ESG look like in 2020?

SRI2010.jpgThis week I am in San Antonio for the annual SRI in the Rockies conference, bringing together over 500 representatives from the socially responsible investing (SRI) community, environmental social and governance (ESG) research firms, financial planners, and yes, a few companies including Intel, Dell, Campbell’s Soup, AMD, Avon and Merck. Ok, I know that San Antonio is not in the Rocky Mountains – I think perhaps the conference organizers’ have broken geography barriers for the conference location as a symbolic representation of how the boundaries of the socially responsible investing community have morphed and evolved over the years.

This is actually my 8th time at this conference. For me and for Intel, it’s a great opportunity to connect with a broad range of the analysts and investors who track Intel’s CSR performance. Many of the people at the event have been engaged in dialogue or covering Intel for more than a decade, and we can credit the ongoing dialogue and feedback with continued improvements in our reporting and performance over the years. Personally, this is a chance for me to spend two days immersed in discussions on the latest research, a review on the most recent trends on a broad range of issues that can impact company performance and investment returns – from water scarcity to the price of carbon to human rights in the supply chain. This is information that I (and my colleague Gary) who’s also attending, can share back with different groups across the company who directly manage these issues at Intel.

Right now I’m sitting in a session on the topic of “Value vs. Values”, discussing whether there is a conflict between investing with your values and achieving investment returns. If there’s anything that I’ve witnessed since my first SRI in the Rockies conference back in 2001 and this panel is illustrative of that, the discussion at the conference has dramatically shifted toward discussing in much more quantitative and analytic terms, the connection to value and focus on mainstreaming SRI. Some on the panel see this as a great advancement – the more we can create that connection, the more we can effect systemic change and improve the quality of investment analysis by taking into account sometimes overlooked risks and opportunities. But there were also some thoughtful concerns raised from Mark Regier of Everest Investing which is a faith-based investing organization, cautioning about the dangers of conflating SRI and ESG, that the rush to ESG and focus on making the business case can discredit the decision of many investors who put values first and may or may not be willing to accept a slightly lower return in exchange. At Intel we have been very focused on analyzing the connection to business value and integrating into decision-making, working with our corporate finance groups on tools to help us better map this value. However, I think Mark’s view is important – that there will always be some things that are hard to measure and maybe don’t have a significant material or easily measureable impact, but nonetheless are decisions that we still need to prioritize as companies because they are the right thing to do and have significant impacts on stakeholders. But my sense, is whether or not we can quantify, we can always talk about this in terms of strategic and long-term value, even if we can’t get to a number. Perhaps Michael Jantzi put it best when he commented, “Todays values are likely tomorrow’s risks.”

Considering how much has changed in the past ten years, I invite both participants in the conference and those tracking virtually on twitter (hashtag #srir10) to share their thoughts here on the most important priorities for the field of socially responsible investing and the connection of ESG factors to investment and business value, as well as any specific feedback for Intel on what we can do to help advance the field and improve our own performance.

So, what do you think are the most important issues and needed actions over the next 10 years? What do you hope to see change by 2020?

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