Mark Robertson of EIRIS looks at how the finance sector might regain the public’s trust.
The finance sector has certainly got itself into a pickle over the past three years. Levels of public trust and confidence in financial institutions are at an all-time low.
Yet, within the finance sector are organisations and individuals who have been and are still focusing on ethical and responsible investment practices and personal behaviour. These organisations can continue to build their reputations because, at an individual level, they never really lost them.
The path to finance sector rehabilitation is likely to be one in which financial firms position themselves as the eyes and ears of investors looking for, and dealing with, forthcoming problems in the marketplace. Finance companies need to work on protecting the interests of all, rather than seeking simply to avoid disaster themselves (with mixed success) and trying to stay one step ahead of the regulators.
This means seriously addressing issues like climate change and biodiversity and ways in which globalisation could fail to benefit everyone. Each of these themes contains the seeds of mass value destruction for the world’s investors if not properly addressed.
What kind of culture and leadership is appropriate for a finance sector that needs to play its part in long-term sustainable wealth creation for the benefit of society as a whole?
The answer to that question could lead to a new approach that might indeed generate fresh public esteem for the finance sector and all who work in it.
EIRIS – Experts in Responsible Investment Solutions