Much of the share market’s current volatility can be traced back to weaknesses in corporate environmental, social and governance (ESG) standards, the seventh annual conference of The Australian Council of Super Investors (ACSI) will hear next month.
The conference, ‘Investing for the Future: Leading by Example’, will take place on Friday, June 6 at Sofitel Melbourne, and kick off with a presentation from Louise O’Halloran, executive director of the Responsible Investment Association Australasia.
She said her talk, ‘Enlightened Self Interest’, will clearly outline the business case for responsible investment. Louise describes her presentation as “a bit like An Inconvenient Truth but made especially for the finance sector…Times may be turbulent, but that is no reason to forget about ESG issues. Indeed, since some of the current volatility can be traced back to ‘ESG’ weaknesses, now is the time that we should re-emphasise the importance of good governance, and the proper management of environmental and social issues.”
The president of ACSI, Michael O’Sullivan, said it took brave leadership to remember the importance of these long-term factors at all times, and not to discard them as a perceived hindrance to performance. The presiding volatility, however, will be put under the microscope at the conference.
The failures associated with the likes of Centro, MFS, and Allco will be extensively discussed in the session ‘Lessons from Centro and Others’ featuring Martin Lawrence of the RiskMetrics Governance Services Unit and Michael West, journalist with The Age. “When seemingly healthy companies share prices fall sharply and abruptly, it is easy to look around for someone to blame. In many cases however, the weaknesses that led to the now obvious ill-health of the company was already apparent,” Lawrence said.
He did not intend to focus on just who was to blame but also on whether these failures could have been avoided and the lessons to be learned, Lawrence added. The need for greater leadership to help bring ESG considerations into the mainstream is one possible lesson from the share market collapse, and the final session of the day will consider how to achieve it.
The final session’s panel will feature Andrew Sisson, the director of Balanced Equity Management, Anne-Marie Corboy, the chief executive officer of HESTA Super Fund, and Chris McArthur, senior asset manager with Colonial First State Global Asset Management’s infrastructure funds. For a copy of the full conference program, visit www.acsi.org.au.