By M. Nicolas J. Firzli, David Weeks, Nick Sherry

This paper co-authored & edited jointly by M. Nicolas J. Firzli, David Weeks and the Hon. Nicholas Sherry looks at the twin notions of asset ownership and EESG-driven investment in relation to the emerging financial policy agenda of the 47th G7 Summit (Carbis Bay Summit) from the perspective of G7 and Australian pension investors and board members (trustees), which were discussed notably at two recent global conferences organised by the Singapore Economic Forum (SEF) and the G7 Pensions Summit (G7 P7).

Here, the authors use the term ‘EESG’ coined by former Delaware Supreme Court Justice Leo E. Strine Jr. to emphasize employees and workers’ rights dynamics – also a section of the present article based on recent interviews with Dr. David H. Webber, Boston University School of Law.
Dr. Webber also co-chaired the Roundtable on The Framework for Inclusive Capitalism with, inter alia, Renaye Manley, fmr. member, Advisory Board, Federal Reserve Bank of Chicago (FRBC), Daniel Pedrotty, Director, North America’s Building Trades Unions (NABTU) and Deborah Goldberg, Treasurer & Receiver General, State of Massachusetts, Chair, Mass. Pension Reserves Investment Management (PRIM), the $ 90 bn. public employees and teachers’ pension fund.

Weeks, Sherry and Firzli explain that the ‘greenium’ phenomenon observed recently in most financial markets means most green bonds now trade with a lower yield than comparable conventional bonds, a natural reflection of changing risk/return perceptions, “most notably from the part of employee-nominated pension board members in G7 nations [plus Singapore and Australia], who represent broad cross-sections of society at large.”
They argue that this recent trend represents yet another sign of the progressive transition towards asset owners-led financial markets or “fiduciary capitalism.”

The authors also look at recent developments in Green Bonds, Social Bonds, Real Assets & Financial Innovation, the title of the keynote address delivered by Bertrand de Mazières, DG Finance, European Investment Bank (EIB), the Luxembourg-based European Union development finance institution and the world’s leading supranational issuer of fixed income instruments. Mr. de Mazières insists on the dual role played by sustainability-driven fixed income investments: not only do they fund additional infrastructure projects, but they also induce issuers, institutional investors, and governments alike to adopt (E)ESG-informed approaches more systematically, across the board.

Source: SSRN