The sustainability of company business models and profit growth can be affected by a wide range of environmental, social and governance issues (ESG).
For precisely this reason AMP Capital searches for ESG insights and seeks to incorporate them into investment decision making – whether these relate to oil spills, poor human rights records, questionable remuneration structures, or anything in between.
Milton Friedman, the eminent economist from the last century, spoke only one language. His was the language of making profits. To quote Friedman himself, “The business of business is business”.
No mention here of governance and environmental management affecting efficiencies and profits. Likewise some investors might not care about environmental, social and governance issues, as long as they are able to make a good return on their investment. After all, not all companies will have a giant oil spill in the Mexican Gulf, so why speak in a language that extends beyond profits?
To read AMP Capital’s Governance Report, click here.
26 July 2012
