NED Audit Committee Workshops - May 2012

The last few years have witnessed a significant rise in the importance, to businesses generally, of sustainable development - economic development which meets the needs of the present, without compromising the ability of future generations to meet their own needs.  The banking sector has long recognised the need to factor consideration of, say, contamination risks into collateral valuations. However, meeting the challenge of interpreting the implications for corporate lending, or for asset management, of sustainability "megatrends" - such as climate change, resource scarcity or population growth - remains a "work in progress".

Elsewhere in the financial services sector, for example in private equity, the importance of what has become known as "responsible investment" is only now becoming more apparent.  The private equity industry response to the responsible investment agenda is evolving rapidly. A recent PwC survey of the private equity industry found that this trend looks set to continue in the near future with 94% of respondents saying they will be increasing their focus on responsible investment activities in the next five years.

The majority of survey participants believe that managing environmental, social and governance issues can create value, but far fewer are attempting to measure and value environmental, social and governance improvements. Over the coming years, demonstrating the value of an responsible investment approach will remain a key challenge for the industry.

Phil Case, explained what this means for Executive and Non Executive Directors in the financial services sector in the Channel Islands.  Phil ran workshops in both islands dealing with the results of the survey and their implications locally and also shared some of his experience of working specifically with Private Equity houses on the responsible investment agenda.   
The presentation attached gives some of the highlights covered in the workshops. If you have any queries, please do not hesitate to contact Paul Silcock, Nicola Mills or your usual PwC contact.