Here’s a different outlook on the financial crisis: what if everyone invested in the stock market is partly responsible because they allowed their money to be managed without much insight or scrutiny?
While it’s unrealistic to assume the public can conduct complex algorithms, it’s not half-baked to believe people should know where their money is invested, according to Ashley Hamilton, a sustainable investment consultant.
Hamilton works in the field of shareholder engagement, where she leverages investors’ ownership in companies to catalyze change in social and environmental policy. She says the investment sector has gotten very good at making money management seem like an obscure and frightening topic, essentially removing people from their money.
“The fact is, it’s our money, we need to have an understanding of it,” says Hamilton, who points to people’s RRSPs and pensions as two areas that need greater scrutiny.
“I think one easy step is for people to find out where their money is invested. If you have RRSPs that you have privately invested with your bank, find out how it’s invested, what companies do you own?”
This should be followed by asking investment managers or pension fund administrators if they have responsible investment policies, and if they work with companies to change “environmental and social issues that concern them.”
If more people begin to ask these questions, investment managers will be more inclined to offer environmental and social products, says Hamilton, adding currently many are able to say there is no demand for such products.
”But when you ask people they say ‘I would be interested in that,’ so there is this disconnect,” says Hamilton. “We need people asking more questions, and more scrutiny of investment managers encouraging them to start looking at the issues as part of their investment process.”
Hamilton has been working with pension funds and investment managers to facilitate conversations with companies about environmental, social and corporate governance issues for the past six years. She says there is much potential in this approach, especially if shareholders increasingly begin to value environmental and social concerns.
Through her work, she’s helped a mining company operating in Guatemala adopt a human rights policy. The company later went on to conduct a human rights impact assessment, the first of its kind in Canada, and publicly disclosed the entire report.
“I feel shifting a company of that size, shifting their consciousness about human rights, was really quite interesting and fairly significant,” says Hamilton.
Large investors are becoming interested in environmental issues, and on a smaller scale social issues, which she finds encouraging. As companies recognize investors value these practices they are more likely to make changes.
“I think what’s really inspiring is when you sit across the table from a CEO and talk about these issues and have them take you seriously. That’s inspiring, and it’s just a baby step but I think it’s a significant change from five to 10 years ago,” says Hamilton.
Hamilton previously owned Ashley Hamilton Consulting and now works at PIRC in the U.K.
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