Dr Craig Mackenzie, director of governance and socially responsible investment (SRI) at Friends, Ivory and Sime plc (FIS), the European market leader in SRI, reinforced the link between business ethics and sustainable forestry.
His company, he said, invests in more than 1,000 companies over the world, including those that account for around 50% of the timber used in the UK, so it has a huge, if indirect, link to the forestry sector.
Change had taken place, he said, on the Pensions Act disclosure regulation which means that all pension funds now have to declare the extent to which they commit to environmental, sustainable investment. ‘Sixty per cent have committed to this, so the investment community has started to take notice,’ said Dr Mackenzie.
The key question is ‘do sustainable development issues raise risks and opportunities for business? If not, then the investment community and its shareholders have no mandate to drive change,’ he said.
If a company’s unethical practices (anything from poor labour standards to poor forestry practices) are exposed, he said, its shares will fall and its shareholders will take the rap.
FIS, he added, encourages the com-panies it invests in to: understand their exposure to significant environmental risks; disclose significant risks and opportunities in their annual reports; explain their risk management approach; deve-lop strong environmental management systems; and join the WWF 95+ Group
‘There is a fundamental need for debate with investor companies about sustainable forestry and also debate on what constitutes good environmental management and is therefore low risk,’ he concluded.
