Around two-thirds of U.K. investors don't know whether the activities of industries or companies they are investing in are ethical, according to a survey by Triodos Bank.

World leaders have called for sustainability reporting by companies to become normal practice and for such metrics to be used by investors.

Bank of England Governor Mark Carney said investors need to wake up to the potential for huge losses from a sudden shift in regulations designed to curb global warming and the use of fossil fuels.

Tesla Motors Inc. Chief Executive Officer Elon Musk said revelations that Volkswagen AG cheated on diesel emission tests is “obviously bad,” but that the issue the world should really be concerned about is carbon dioxide emissions.

The scandal at Volkswagen AG impacted the portfolios of many investors in European equities this week and raised questions about the carmaker's inclusion in sustainable stock market indexes. Allianz Global Investors, part of the asset management division of Europe's largest insurer, does not hold Volkswagen in its Global Sustainability fund, according to its portfolio manager Paul Schofield. He explains why to Bloomberg Brief Editor Siobhan Wagner and talks about the lessons sustainable investors can learn from this week's events. The interview has been edited for space and clarity.

Climate change, nuclear proliferation and labour exploitation are some of the greatest challenges of our time. Concerned investors have been able to find a voice by investing ethically but there has been a nagging doubt that they may forego investment returns. Today ethical investing is supported by new investment research that recognises that there is not a financial trade-off when investing ethically. In fact, investors can achieve superior investment performance when investing ethically.

Northern Trust, one of the world’s largest investment managers, expects stronger growth in its environmental, social and governance integrated funds from a shift towards more responsible investing.

The sixth largest asset manager in the world has said ESG investments have become intrinsic to its strategy.

Douglas Hodge, chief executive of the $1.59 trillion global investment management firm PIMCO, argued it was in their own interest to analyse ESG risks in todays changed world, in his opening address to delegates at the PRI in Person conference.

Posted On: Wednesday, 12 August 2015

The New Zealand Superannuation Fund continues to perform well as a responsible investor, ranking among the top tier globally, the manager of the Fund, the Guardians of New Zealand Superannuation, said today.

A new report published by the PRI finds that fiduciary duty is not an obstacle to asset owner action on environmental, social and governance (ESG) factors. Fiduciary duty in the 21st century looks at fiduciary duty across eight markets (US, Canada, UK, Germany, Brazil, Australia, Japan and South Africa) through a series of events, interviews, case studies and a legal review.

Fiduciary duty has long been a contentious issue, especially in the US. Asset managers and advisers have often cited fiduciary duty as a reason for not incorporating ESG factors into the investment decision-making process, claiming that looking at non-financial indicators was not consistent with their fiduciary duty.