Russian investors have not grown to the SDI

Contact the social and environmental performance of the company's executive compensation, emissions of greenhouse gases, responsible supply chain management - similar items in the information requests of foreign investors sometimes baffled IR-services employees of Russian companies. Meanwhile, the socially responsible investment (SRI) or ethical, social, and environmental aspects of corporate governance practices of issuers in investment decisions has become commonplace in developed countries. SDI - a manifestation of corporate social responsibility (CSR), the investment community, which in recent times and they say in Russia. More and more investors realize that they have the opportunity to not only get a return on capital, but also to create positive social change, to reduce the negative impact on the environment or invest in accordance with religious or ethical beliefs. For 40 years, SDI has gone from sporadic cases of ethical investment to a single segment of the stock market with its stakeholders and infrastructure. Despite the economic crisis, global SDI to the end of 2009 amounted to about $ 10.8 trillion, up 50% more than in 2007-m1. European markets account for 65% of the global SDI, the U.S. market - 28% in other markets (primarily Canada, Australia, New Zealand and Japan) - 7%. SRI in the Russian stock market is practically not represented, although in other emerging markets (eg China, Brazil and South Africa), SDI funds functioning successfully. From the Protestant ethic to the sustainable development of economic doctrines Religious served as the basis for the emergence of SDI. A special role in the integration of ethical principles in the investment process is attributed to the Quakers, Mennonites, Methodists and other Protestant groups in North America, separating the specific ethical notions about money. SDI on top of the stock market development in the 1960s and 1980s to a greater extent correlated with the concept of "ethical investing", which later became a focus of SDI. Ethical investing is based on the failure of investments in securities of companies whose activities do not correspond to the individual views and beliefs of the investor. The reaction of civil society on ethical issues was the prerequisite for the development of SDI in the U.S.. A landmark event was the establishment in 1971, the fund PAX World, who declined to investments in companies that derive income from the Vietnam War. In the same period in the U.S. have developed the Global Sullivan Principles, calling for the abandonment of investments in companies operating in South Africa and thereby supported the apartheid regime existed there. With the development of SDI is a change of theoretical ideas about it. Concerns about civil society European issues related to human rights and labor practices that led to the integration of social criteria in investment decisions. Thus, in 1980. began the transition from the concept of "ethical investment" to the notion of "socially responsible investing." In the 1990s, the concept of sustainable development.2 and hypothesis about climate change have received international recognition. In this regard, the concept of SDI including environmental aspects. Along with the term "socially responsible investing" were using the term "responsible investment", "sustainable investing" and "investing in the triple outcome." After high-profile corporate scandals in the early 2000s (eg bankruptcy of Enron and WorldSom) controls the stock markets began to focus on corporate governance issues. In particular, in 2002 the USA adopted the Sarbanes-Oxley, presenting requirements for issuers with respect to internal controls, corporate governance and disclosure. Investors have also become more attentive to the corporate management of issuers, making it one of the areas of SDI. Investment numbers have grown since the establishment of a fund PAX World in 1971 range of investors involved in the SDI has grown considerably. These include both natural and legal persons who invest their own funds, and intermediaries - professional stock market participants, taking into account social, ethical, environmental factors and corporate governance practices of issuers in making investment decisions. For institutional investors in the segment of the SDI are financial institutions that invest their own funds, including commercial banks, insurance companies and pension funds and investment banks (companies) engaged in asset management entities, including churches, community organizations, educational institutions etc. As a catalyst for the development of SDI were retirement funds. In 2000, the UK and then elsewhere in the EU and the U.S. in pension legislation has been amended in accordance with which pension funds are required to disclose the extent of their participation in the SDI. Norwegian lawmakers have gone further and ordered the State Fund of Norway "to avoid investments that have an unacceptable risk that the fund will contribute to unethical behavior, including violations of fundamental humanitarian principles, serious violations of human rights, corruption, or a significant negative impact on the environment" 3 . Individual investors in the segment of SRI is an investment company representing the interests of individuals, or individuals themselves, which are the professional stock market participants. The most popular form of SDI - mutual funds (mutual funds). In mid-2010 in Europe was 879 SRI mutual funds, the management of the order of 75 billion Euro 4. In 2006-2007, more than 20 pension funds, charities and government funds have adopted the United Nations Principles for Responsible Investment (PRI). In January 2011 PRI signatories were 852 organizations, including the owners of the funds, professional managers, information and analytical organizations and stock exchanges. The former Soviet Union to the PRI joined only two organizations in Estonii5. In 2010, the U.S., there were 250 SRI mutual funds in the management of which was about $ 316 billion The methods are different in the 1970s and 1980s, the main method of SDI was a negative approach to the selection of investment projects (negative screening or exclusion) . Investors from the U.S. and the UK, guided by ethical considerations, began to exclude from the portfolio securities of issuers from the companies so-called "sin" industries (alcohol, tobacco, gambling, etc.). For example, in the 1980s, the California pension fund of civil servants (CalPERS) from investing in the company of South Africa in protest against apartheid. Go to the negative approach is referred as screening, based on the principles (rules). It consists in the exclusion of companies that do not meet the principles of CSR (human rights, ensuring labor rights, environmental protection, anti-corruption, etc.), as described in the main international instruments such as the UN Global Compact, Millennium Development Goals, The main ILO conventions, OECD Guidelines for multinational companies. Measured against the principles can produce either the investor or specialized information analysis company. In the early 1990s started the application of positive screening - selection of companies that have a minimal impact on the environment and conducting an active social policy. The most common type of screening in the positive approach - the selection of securities "best" companies in its sector (best-in-class), which allows to diversify the portfolio. Slightly less common so-called "pioneer" screening, in which investors select securities of companies showing the best results in a certain direction, such as environmental protection. Also, institutional investors have begun to use the "interaction", which consists in the use of shareholder rights to influence the activities of issuers in CSR. Interaction takes place through meetings with the issuer, a vote at general meetings of shareholders, shareholder resolutions signing, communication with the media, etc. The difference between this method of screening is that the interaction does not affect the selection of securities, and is formed in the portfolio. The information power an important role in the infrastructure of the SDI hold information and analytical companies and nonprofit organizations that specialize in SRI, CSR and sustainable development. In 1985 the UK was based organization EIRIS, which provides institutional investors with performance of companies in areas of CSR. Now the world dozens of similar organizations. Also provide information support to SDI SDI Forum - an organization composed of market participants. Regional forums are in Europe (Eurosif), Asia (ASRiA), Oceania (RIAA), Germany, Austria and Switzerland (FNG). National forums operate in more than 10 countries. Information support for SDI has improved due to the proliferation of non-financial reports (reports on sustainable development, CSR reports, social reports, environmental reports, reports on corporate citizenship, etc.), in which companies disclose information about labor practices, environmental protection , interaction with society and other aspects of CSR. In 2009 was released about 3,400 non-financial reports. In 1989, work began on the launch of Domini 400 Social Index (renamed MSCI KLD 400 Social Index), first stock index, which reflects the dynamics of share prices of leading socially responsible companies. In 1999, the U.S. launched the Dow Jones Sustainability Indexes, and in 2001 - FTSE4Good Index Series. At the end of 2010 there were over 100 such global, regional and national indices based on various criteria SDI. Also, gradually increasing the role of the organizers of trade in development of SDI. Thus, Yohannesburgkaya Stock Exchange (JSE) requires issuers of mandatory publication of non-financial reports. More than 10 stock exchanges issued recommendations for issuers active in the field of CSR. On the 14 stock exchanges indices are based on the criteria of SDI. The Spanish Stock Exchange (BME), Frankfurt Stock Exchange (Deutsche Borse) and Hong Kong Stock Exchange publish their own non-financial reports. It is time to adopt until the little Russian investors are concerned about the ethical, social and environmental aspects of the companies in which they invest. At the same time, Russian issuers to raise capital on foreign markets, can use their achievements in the field of CSR to attract capital investors who use SRI criteria, and improve the reputation of the investment community. Improving CSR practices should take into account investors' expectations. Thus, this process can be started with meetings with representatives of investment funds, or conducting research to assess the information needs of investors with respect to CSR. Then the company can analyze the current situation - identify strengths and weaknesses of their management of CSR. In addition to investors' expectations, the criterion for the analysis of the experience can be a leading peers and international standards for CSR, for example, adopted in 2010, International Standard ISO 26000 - Guidance on social responsibility. Companies can attract the attention of investors and the general public, if they enter into one of the indices based on the criteria of SDI. Leading from them - Dow Jones Sustainability World Index (DJSI World), which represents 10% of companies with the best results in the field of CSR of the 2500 companies in the Dow Jones Global Total Stock Market Index. The components of the index are determined by periodic analysis to isolate the "best" companies in its sector (57 sectors). In the analysis methodology provides general criteria for economic, environmental and social areas, as well as specific criteria for different sectors. Criteria for inclusion in the DJSI World Destination Criteria Economic Presence Code of Conduct / Compliance with Law / Anti-Corruption Corporate governance Risk management criteria depending on the sector Ecological Environmental reporting criteria according to the social welfare sector labor practices Human Development Social reporting Attracting and retaining qualified personnel Criteria depending on the sector companies can bring to investors about its progress in the field of CSR in non-financial reporting. In many ways, should be treated the same way as the financial statements. These kinds of statements are complementary, allowing investors to gain a more objective view of the company. Comparison of the characteristics of financial and non-financial characteristics of financial reporting Sustainability reporting format for the standard form of financial (accounting) statements of accepted standards of reporting forms in free form or by accepted standards of Community Internal and external users internal and external users Periodicity Annual, semiannual, quarterly or annual two-year Horizon reflect past performance and current status of the organization reflects past performance, current status and plans of the organization can have on the future of Compliance Mandatory compliance with accepted standards of voluntary compliance with accepted standards of legal framework developed legislation in almost all countries, legal framework, there are only a few countries, mandatory training for sure Be sure to listed companies to publicly traded companies in some countries, statutory audits of public companies for sure in some cases, sure for public companies in some countries, in contrast to accounting, accounting information for the CSR has not yet been developed stricter standards. However, in accordance with the Guidelines for reporting on sustainable development of the Global Reporting Initiative (GRI) annually produce more than 1,200 non-financial reports of companies. Using this standard makes it possible to report higher quality since it was developed by a group of experts who identified the most significant aspects of the organizations for public disclosure. Maybe in a few years of financial and nonfinancial reporting will be integrated. In 2009, with the participation of GRI was established an international committee to develop a detailed reporting standard, reflecting the economic, social and environmental aspects of the company. Successful promotion of non-financial report is determined not only by its content and quality, but also the interaction with stakeholders. Thus, the company can use the results of meetings with investors to identify the main topics that should be reflected in the report. Promotional activities will include a report of his presentation at various external events, direct mail, participation in various competitions, a video presentation on the corporate website, etc. 1 Calculated by the author based on reports from the European forum for sustainable investment (Eurosif), the Social Investment Forum (SIF), Social Investment Organization of Canada, Oceania Association for Responsible Investment (RIAA) and the Social Investment Forum Japan. 2 The term "sustainable development" was first used in the report of the chairman of the UN Commission on Environment and Development in 1987, he became popular after the adoption of the document "Agenda for the XXI Century" at the UN International Conference on Environment and Development - The Summit "Planet Earth" in 1992, 3 Manual for observation and exclusion of the investment area of ​​the State Pension Fund, adopted by the Ministry of Finance Norway, March 1, 2010 according to the Law № 123 from Norway December 21, 2005 4 Green, Social and Ethical Funds in Europe 2010 Review / - Vigeo. - Milano, 2010 5 Signatories to the Principles for Responsible Investment / / PRI. URL: http://www.unpri.org/signatories/ # psp