Why ESG4Real exists
ESG4Real was started in 2015 by the asset management / pension units of labour unions FNV in the Netherlands and LO in Sweden because of frustration regarding low transparency about how asset managers integrate ESG in investment processes and irregular reporting. The initiators also identified potential to increase the general ambition level among investors.
Interest for RI has increased rapidly during the last decade and the amount of total capital invested responsibly continually increases. However there are a number of challenges that inhibit the development, such as different definitions and perspectives on RI, lack of transparency, traditional view of financial return and incentive schemes and costly analysis and lack of ESG data. The challenges result in low transparency between asset owners and asset managers and difficult for asset owners to know what they get in terms of RI. Furthermore asset managers face different demands from individual asset owners, which has the effect that asset managers need to adjust their offering to investors on all levels. There has been a lack of a transparent and quality assured minimum level.
To address this issue the project group of ESG4Real worked with more than 50 asset owners and managers and RI experts in Sweden and the Netherlands during 2015 and 2016 to establish a transparent base model within RI, called the ESG4Real Standard. This is meant to increase the general ambition level and add value on the market without incurring too much cost for individual investors. To guarantee a trust-worthy certification process ESG4Real is designed to enable certification by actors accredited to ISO17065.