PRI and LEAD - overcoming the risks of short-termism

May 21, 2014

The Principles for Responsible Investment (PRI) and the UN Global Compact LEAD are working to overcome the risks of short-termism. Understanding the value of sustainability and communicating with investors took center stage at the recent event ‘Realising Long-Term Value for Companies & Investors’ held in Rome. The event marked the launch of a joint report by the PRI and LEAD Strategies for Managing the Impacts of Investor Short-Termism on Corporate Sustainability.

Short-termism in investment markets is a major obstacle to a company’s ability to fully embed sustainability in strategic planning and capital investment decisions. In asking what companies can do to reduce the negative impacts of short-termism on their long-term strategies and investments, the new report outlines three broad corporate strategies to cope with short-termism within the existing investor base (short-term), shift to a more long-term oriented investor base (medium-term) and to support wider systemic change in the capital markets (medium to long-term). More information on this initiative is available here