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 responsible investment of pension funds includes measuring environmental, social, and governance risks, and assessing their impact. 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 regarding the need for pension funds to measure environmental, social, and governance (ESG) risks and assess their impact on investments.
Nyree Stewart reports that the damage done to pension funds could have been avoided: https://www.ipe.com/bp-oil-spill-triggers-call-for-tighter-uk-esg-pension-rules When such a disaster strikes, a representative of the company is generally wheeled out to issue some 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 and 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.
Each individual can make a contribution to resolving this problem. You can review your pension portfolio and liaise with your financial adviser to make sure responsible investment is happening.