A UN Summit in New York on Thursday of business leaders was told of the results of a new survey by managements consultants Accenture and the UN Global Compact, which found that a large majority of CEOs  believed more must be done by investors if the world is to reach the tipping point in the creation of a sustainable global economy. The survey found that 86% of CEOs wanted investors to more accurately value sustainability in their long-term investments.

Also on Thursday, Deutsche Bank Research, said in a new report that responsible investments (RI) are increasingly attracting the attention of institutional and private investors. RII refers to financial products and themes which consider environmental, social, governance or ethical issues in addition to financial performance.

DBR said there has been growing demand for responsible investments over the past years. According to estimates published by the European Sustainable Investment Forum (Eurosif), global assets under management in RI amounted to €6.8trn in 2008. Assets under management have expanded strongly in recent years, especially in Europe (chart 2 above), where growth averaged 42% p.a. between 2005 and 2007 (adjusted for those countries that were included in the Eurosif survey for the first time in 2007). Over the same period, RI assets under management in the US grew at an average annual rate of 9% (chart 3 below). However, this comparatively moderate development in the US followed a phase of strong growth in the second half of the 1990s when RI assets under management quadrupled within five years. The growth in responsible investments in the US between 2005 and 2007 was still as much as 18%, while the growth in total assets under management over the same period was only 3%.

Additional findings from the survey of 766 CEOs included:

• Majority of CEOs unsure that investors will drive corporate responsibility
• 86% of CEOs ask investors to better price sustainability issues into valuations.
• PRI Chairman responds by urging investors to ‘push further’ despite recent progress.

Since its creation in 2006 the US$20trn UN-backed Principles for Responsible Investment Initiative (PRI) has been working to persuade mainstream investors to better integrate environmental, social and governance (ESG) issues into valuations and investment processes, and the Chairman of the Initiative today welcomed the Accenture/Global Compact survey and called for companies and investors to work together to go, ‘beyond the tipping point’.

Donald MacDonald, Chair of the Principles for Responsible Investment Initiative said,“Time and again investors have seen how ESG issues can affect investment performance and there is now a critical mass of institutional investors who know that good management of these issues is an  important factor in for the  long-term financial success of their investments.  I expect the next decade to be an age of responsibility for capital markets.”

“If a company has poor corporate governance or persists with bad environmental management then it can, and should, affect the long-term valuation of the company. The truth is that’s still a relatively new concept for many investors, but there are now leaders in mainstream markets that have developed the tools and models to integrate sustainability and who can push the global capital markets beyond the tipping point on sustainability.”

Gavin Power, Deputy Director of the UN Global Compact said, “The momentum is there from both companies and investors to create a sustainable economy. In particular it  is remarkable that in just four years over US$20 trillion of assets have been signed to the Principles for Responsible Investment. I believe that sends a powerful message to the corporate world that the will is there from the investment community to build more sustainable capital markets. Companies and investors must now work together to identify and overcome the barriers that prevent sustainability from being permanently embedded into the majority of global business activity.”

The survey was conducted by on behalf of the UN Global Compact and launched at the Global Compact’s Leaders Summit in New York. The survey contacted 766 CEOs and top executives including face-to-face interviews with over 50 of the world’s foremost business executives.

More than 700 CEOs across the globe are sharing their thoughts on doing business in a global economy, with Peter Lacy, Accenture and Georg Kell, United Nations Global Impact: