Sustainable investment has grown rapidly in recent decades. Its roots were in religious movements in Anglo-American countries in the 18th century. However environmental movements in the early seventies significantly shaped present sustainable investment approaches.
In the late 20th century and during the 21st century the rise of sustainable investment has been closely linked to the major changes in society, especially in such key social movements as the environment, human rights and animal welfare. Today, SRI and ESG are increasingly becoming recognised not just for the positive impact it has on the World but also as an opportunity to drive superior long term returns.
Conscious investing begins
The Methodist Church begins investing in the stock market, and consciously avoiding companies involved in alcohol and gambling.
Social investing becomes mainstream
Investors contribute to a variety of causes – women’s rights, civil rights and the anti-war movement.
Ethical funds developed: Pax World Fund
One of the earliest ethical funds is developed. The Pax World Fund avoids investments in companies involved in the arms trade industry.
Ethical-environmental banking begins in Europe
The first ethical and environmental bank in Europe is launched - GLS Gemeinschaftsbank.
The most disastrous nuclear power plant accident in history occurs. This leads some investors to rethink their exposure to the nuclear industry.
Intergovernmental Panel on Climate Change
The Intergovernmental Panel on Climate Change (IPCC) is established by the United Nations Environment Programme (UNEP) and the World Meteorological Organization (WMO). Its original role is to produce recommendations with respect to the state of knowledge of the science of climate change and its impact.
Exxon Valdez oil spill, Alaska
10.8 million US gallons (40.9 million litres) of crude oil spill off the coast of Alaska causing devastating environmental effects. This disaster, and others, increases the awareness of the large-scale environmental risk that some industries create and the importance for investors to factor in those risks.
Signature of the Kyoto Protocol in which countries globally acknowledge the existence of a man-made global warming and commit to reduce greenhouse gas emissions to combat it.
Dow Jones Sustainability Indices
Dow Jones Sustainability Indices created to track financial success of companies most advanced on sustainability topics.
The Enron scandal becomes public. This remains one of the biggest accounting scandals in history, leading to the bankruptcy of the company and the dissolution of Arthur Andersen, one of the top 5 accounting firms in the world. It also contributed to highlight the importance of analyzing governance as part of the analysis performed by investors.
Major weather events, such as Hurricane Katrina, point to changes in climate. The extensive media coverage contributes to raising awareness among US citizens that climate change does and will have a significant domestic impact.
An Inconvenient Truth
Al Gore’s documentary on climate change -An Inconvenient Truth- is released. The documentary, from a former US Vice President, builds on the most recent research to make the case that climate change is the defining environmental issue of our time and that no one, including investors, should ignore it.
Subprime mortgage crisis begins
The subprime mortgage crisis begins in the US, with significant impacts continuing to 2012 and effects still prominent today. The crisis follows years of relaxing lending standards in the US mortgage market, rendered possible by weak oversight and the fragmentation of the mortgage ecosystem from firms incentivized to sell mortgage to those that actually bear the default risk.
Rana Plaza building disaster, Bangladesh
Garment factory building collapses in Bangladesh killing 1,129 and injuring 2,500 more. The event triggers companies and individuals to re-consider involvement with companies that provide unsafe and poor working environments.
Paris Climate Agreement
The Agreement defines a path for worldwide average mean temperature rise to stay below 2 degrees Celsius by 2100. Under the Agreement each country must present its national plan to mitigate greenhouse gas emissions, implement and monitor it.
UN PRI’s 10th Anniversary
In its 10th anniversary year, the UN PRI (Principles for Responsible Investment) reaches 1,500 signatories.
Report says coal is more expensive than renewables
Signalling that a symbolic milestone has been reached, a report by Carbon Tracker reveals that 42% of global coal power capacity is already unprofitable. The report argues that the United States could save US$ 78 billion by closing coal power plants, in line with the goals defined under the Paris Agreement.
Californian utilities files for Chapter 11 following climate change fueled wildfires
California’s wildfires kill at least 86 people, destroy 15,000 homes and become the US’ deadliest wildfires in a century. They lead to the bankruptcy of power utility Pacific Gas & Electric Corp. Scientists have warned that global warming was likely to make such wildfires more frequent.
Eurosif Annual Report 2018
Eurosif is the leading European association for the promotion and advancement of sustainable and responsible investment across Europe.
Every two years, Eurosif produces a comprehensive report on the Sustainable and Responsible Investing trends and developments across Europe.
The report can be a useful reference guide and contains a wealth of statistical data, country profiles and referenced appendix.