14 april 2007
India welcomes ethical investing fund launched by ABN AMRO
The new SRI fund invests in companies with good and transparent policies on environmental, social and corporate governance. The screening of companies will be done by the Indian research and rating company CRISIL, and the American firm KLD Research & Analytics. In a consortium with a third partner, Standard & Poor's, they are preparing an index of Indian firms and their performance on environmental, social and governance (ESG) factors. Robin Sandenburgh of CRISIL explained to Asia Times Online that the index will evaluate the transparency, disclosure and management systems of companies. "The initial universe for the index will be the 1,000 largest companies listed on the Indian stock exchanges. The index should be ready at the beginning of 2008."
The Association for Sustainable and Responsible Investment in Asia (ASrIA), an organisation promoting SRI in Asia, has high expectations of the new fund in India. Executive Director Melissa Brown told Socialfunds.com, a personal finance site on socially responsible investing, "A number of Indian companies are working on their sustainability profiles. By Asian standards, Indian management teams have a high comfort level in talking about the issues thanks to a strong civil society tradition."
Moneycontrol.com, India's leading financial information source, brings a story with the headline 'ABN AMRO's new fund: How good is it?'. In this article investment advisor Hemant Rustagi says, "There is no conclusive evidence to prove that socially responsible companies perform better than others." His opinion is contradicted by David Morrow, Global SRI Product Specialist of ABN Amro Asset Management,
"Actually, the majority of academic studies have shown positive correlations between environmental, social, and corporate governance performance, and financial performance. In our view, this relationship will bear out more strongly in emerging markets, because we believe international investors will pay a premium to invest in responsible companies in emerging markets. Why? Because these companies are more likely better-managed companies that have lower risk and better long-term growth prospects as they focus on new business opportunities related to sustainable development."
P+ webtip: Asia Times Online
P+ webtip: Moneycontrol.com