What is Responsible investment
Responsible investment is an approach to investment that explicitly acknowledges the relevance to the investor of environmental, social and governance factors. Therefore, it helps achieve long-term health and stability of the market as a whole.
Several key sustainable business questions are not captured in traditional financial analysis. However, they are increasingly recognised to have a material financial impact.
To capture this value and position investment portfolios, investors and banks are increasingly turning towards ESG (Environmental, Social and Governance) criteria to assess non-financial performance.
In other words, organizations that score well on ESG metrics seems to better anticipate future risks and opportunities.
Similarly, they look like more disposed to longer-term strategic thinking, and focused on long-term value creation. A poor ESG rating from an indepentent provider may result into the exclusion of an asset from investors’ portfolio.
Investments that combine financial and non-financial value creation, or investment that correctly price social, environmental and economic risks are possible only if reliable information are available.
This has led to the flourishing of several ESG Rating Agencies. Such agencies analyse and consolidate on informational platforms data and information included in media articles, sector reports, annual reports, and questionnaires. Above all, each rating agency uses its own set of metrics to measure the level of ESG compliance. In addition, there is, at present, no industry-wide set of common standards.
Why to ask for Get It Fair
GIF ESG Rating scheme is offering a more reliable solution because:
- refers to internationally recognized guidances (OECD) and standards (such as ISO 26000)
- verifies and validates the materiality assessment
- includes a Due Diligence process which combines documental review, data analysis and site assessment
- focuses on forward-looking risk assessment
- provides the “GIF Non-Financial Report” in compliance with the Directive 2014/95/EU
Benefits for banks, insurance and financial institutions
Therefore, the “GIF Non-Financial report” provide by a third party independent body enables banks, insurance and financial institutions to:
- implement responsible investment strategies and allows
- improve reliability and credibility of ESG risks information
- get assurance of a non-financial report in compliance with legal requirements
- reduce the exposure level to ESG Risks
- improve transparency of information related to financial products to be disclosed to customers
- reduce Directors’ and External/Internal auditors compliance liabilities