Responsible Investment

The concept of enduring common goods helps us apply the principles of responsibility. An enduring common good is something that everybody benefits from, but no-one is individually responsible for. There are many possible common goods, but the two we place the highest priority on are a fair society and the environment.

As part of our focus on responsible investing, we have extended our work on CEO behaviour to consider explicitly whether a business is taking irresponsible, impactful risks which could be affecting wider society. This work is built around understanding and identifying the external harms companies’ decisions can cause and whether management has any credible plans to mitigate them.

We undertake this by focusing on two of the most material harms that corporate irresponsibility can create: the erosion of fairness in society and damage to the environment. We try to understand the degree to which management decisions contribute towards these harms. If we can identify harms which we believe are being created by current management behaviour, we seek to understand whether management has credible plans in place to reduce these harms.

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