The man behind the large desk focused on his audience with a face that looked like the back of a pale white thumb. Every word he spoke was an attempt to control the environment and the people around him. He filled the air with sound and answered questions with questions…….
The BP debacle in the Gulf of Mexico has highlighted the need for socially responsible ownership. Many UK pension funds have significant equity and bond holdings in BP and are thus exposed to the oil company’s plummeting share price. The reaction of BP to the crisis has raised concern over its long-term risk management policies and the tendency for the sector to opt for low cost solutions when drilling for oil. This incident has raised awareness levels with regards the need for pension funds to measure environmental, social and governance (ESG) risks, and to assess their impact on investments.
Nyree Stewart reports that the damage done to pension funds could have been avoided: http://www.ipe.com/news/bp-oil-spill-triggers-call-for-tighter-uk-esg-pension-rules_35715.php?s=BP When such a disaster strikes, a representative of the company is generally wheeled out to issue a number of conciliatory statements like a wind-up toy. Most disarming of all is the ability to include an element of truth in the ongoing deceptions. The onus is therefore on ‘players’ outside of the immediate company to exercise their powers. Investors as well as governments have a duty to act as responsible owners, and scrutinize ESG risks and ensure that measures are in place to reduce the probability of such a crisis occurring.