|Title:||Ethical and Sustainable Investing in Belgium|
|Date of publishing:||June 13, 2012|
|Also available in the following languages:||Dutch, French|
Ethical and Sustainable Investing in Belgium
June 13, 2012
“Ethical and Sustainable Investing in Belgium” is a reference worthy of the name. In over 1400 pages Dirk Coeckelbergh1 presents a history and a state of affairs in the field of SRI (Socially Responsible Investing) in Belgium. A bulky book of an inspired author with a witty pen. In his introduction, Coeckelbergh brings forward the challenging and even slightly provocative tone of his work: “Yes, I have a sharp tongue, but if you need to be heard you need a little pop, otherwise no one will listen.”
Dirk Coeckelbergh builds the sense of his study on a number of substantiated sightings: the Belgian banking and insurance is an attractive employment pool with large, recognizable and strong groups, the Belgian savings volumes are large, money does not come in first place in the happiness of the Belgian, ethics and transparency are increasingly important to consumer confidence and ethical investing has a growing popularity and a promising future.
Out of the extensive research, Coeckelbergh distills 10 conclusions. It is clear that the Belgian financial sector suffers from an image problem and needs to develop its reality. The market of ethical / sustainable savings in Belgium has a dynamic development and SRI needs unambiguous definitions and a much more active role of both civil society (NGOs) and the Belgian government. The society plays a crucial role in the design of a minimal definition of sustainable investing (a global NGO label) while the role of government is mainly played in the field of scientific research, transparency requirements and the implementation of a minimal ethical content for products that are called ethically or sustainable.
Finally, Coeckelbergh determines twelve laws that sustainable savings and investments obey. These can be briefly summarised as follows:
- All parties involved externalize the risks of ethical and sustainable investments, but the bill always ends up in the community or the state or, in Coeckelbergh's words, "the weakest and ordinary citizens."
- The financial medium-and long-term returns of SRI funds are as large as that of traditional funds with a similar risk. The social return on the other hand, is much greater.
- The more independent the advice, the more thorough and the more socially responsible the definition of sustainability or ethics in an investment product becomes.
- SRI research using the same methodology must always yield the same results, whether the examination takes places by an external research partner or internally. An internal SRI research Group should be physically separated from other departments within the bank.
- If the research, the consultancy, the monitoring process and the definition of the methodology are not sufficiently outsourced, then the chances are that they will affect each other.
- Financial companies with sustainable products react like normal businesses when confronted with criticism.
- The more thorough and the more comprehensive a financial institution is dedicated to ethical products, the greater its success and return will be.
- If a professional distributor applies the cost / revenue structure of non-durable products to sustainable products, the sustainable investment will be selling directly proportional to the sale of the traditional products.
- The success of the sale of sustainable investments is directly proportional to the effort that a bank does in terms of marketing.
- The buyer chooses a sustainable investment if this product meets the financial sustenance of the buyer in the same way as the non-durable product; i.e. if the buyer knows that besides the non-durable product a sustainable alternative exists that has all the advantages of the traditional product but with benefits in terms of sustainable, if the seller is motivated and well and convincingly explains what sustainability means and if it comes to real sustainability and not to 'greenwash'.
- Sustainable investment for individuals is successful if there is a distributor with distribution power behind it and if the definition of durability is the better in the market and confirmed by an external advisory body.
- Sustainable investment in institutional context is successful if there is a distributor with distribution power behind it and if the sustainability definition is tailored to what the buyer demands, thus not necessarily representing the best or the most ethical. The lower the minimum criteria, the easier the sale goes.
ETHIBEL is confirmed by Coeckelbergh as “The best guarantee today on a good product in terms of ethical impact in Belgium” (p. 799). The independent position of Ethibel in its choice of sustainability criteria, the use of exclusionary criteria, the absence of financial ties with other financial institutions, the transparency and payment of charges by the customer, the lack of exclusive relationships with a specific client group and the use of independent investigators, are shifted forward as major pluses.
1 Coeckelbergh studied political and social sciences and is currently bank manager at Credit Agricole Belgium. He has played a leading role in innovation and ethical investment, in the promotion of transparency and independent auditing, in research and interpretation in Belgium and Europe. His passion got translated into professional engagements with, inter alia, Belsif, Vigeo and Eurosif and voluntary collaborations with numerous non-profit and social initiatives. Furthermore, Dirk Coeckelbergh is particularly active as a publicist, as a government advisor and as a lecturer in law, management, business ethics, social economics, marketing, communication, strategy, sales, insurance and investments.
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