Each week Emerging Markets ESG publishes an interview entitled, “Five Questions about SRI.” The interview features a practitioner’s insights about SRI in emerging markets and through Emerging Markets ESG shares this expertise with a wide global audience. The goals of Five Questions about SRI are fourfold:
- To reflect on what SRI in emerging markets means to practitioners;
- To collect a catalogue of examples of SRI in practice in emerging markets;
- To raise awareness about SRI in emerging markets; and
- To enable SRI practitioners in emerging markets to network with peers around the world.
This week’s interview is with Mike Tyrrell, Editor, SRI-CONNECT, United Kingdom.
Mike Tyrrell is Editor of SRI-CONNECT, a global marketplace for SRI ideas and research as well as an expert network for practitioners, with expertise in investor relations, corporate social responsibility (CSR) and SRI. A practical tool to improve the efficiency of SRI market participants, its vision is to create, for SRI analysis and information, a global, non-partisan online marketplace that is as broad, deep and easy-to-use as the markets that exist for “mainstream” financial information. Prior to launching SRI-CONNECT in 2011, Mike Tyrrell was an SRI analyst at Citi Investment Research, at HSBC Global Equities and at Jupiter Asset Management.
Emerging Markets ESG: How would you define socially responsible investment (SRI)?
Mike Tyrrell: As investment that meets the needs of the current generation without compromising the ability of future generations to meet their own needs
Emerging Markets ESG: What distinguishes SRI from mainstream investment?
Mike Tyrrell: It’s just a bit smarter! SRI investment encompasses all of attributes of ‘mainstream’ investment but adds a broader perspective to them. There are now 21 different SRI strategies so there should be at least one to suit every investor type with every risk appetite or return requirement.
Emerging Markets ESG: Which extra-financial theme – environmental, social or governance – is the most challenging for emerging market companies to manage?
Mike Tyrrell: I am a firm believer that sustainability issues should be managed on a sector-by-sector basis. Also, I don’t believe that emerging markets are the same. So, while local air quality might be the prime issue for Chinese steel producers, water availability is likely to be more important for Chilean copper miners.
Emerging Markets ESG: Which extra-financial theme – environmental, social or governance – is the most challenging for investors in emerging markets to analyze?
Mike Tyrrell: I think that sustainability issues that are heavily dependent on local political activity for their investment catalysts are very difficult for developed world investors to understand. However, I think the principal challenge lies less in the issues themselves and more in the practical difficulties of establishing effective channels of communication between institutional investors and the investor relations and CSR teams of emerging markets companies.
Emerging Markets ESG: One of the features of SRI-CONNECT is “SRI in Emerging Markets – Meeting the Communications Challenge.” Would you please describe this challenge and offer some guidance as to how companies and investors could address it successfully.
Mike Tyrrell: Thank you for the opportunity to explain this. The prime objective of SRI-CONNECT is to improve communications between companies and investors on sustainability issues – at maximum efficiency and lowest (zero) cost. We do this by enabling all participants in the SRI market (IR managers, CSR managers, SRI analysts and portfolio managers) to register their interests and communications preferences within our marketplace and then trusting these professional participants to make contact with each directly.
To support this basic principle, we provide a number of new(ish) technologies such as blogs (the one you mention), discussion groups, events, a wiki and a report that advises companies how to “Take Control of SRI Communications.”
We had thought that this site would have most application for developed markets where CSR and SRI teams tend to be quite large and specialist. However, we are increasingly of the view that this low-cost approach will be also be relevant to geographically-diversified emerging markets.