Manulife Investment Management, in its most recent note to investors, discusses the firm’s “strategy of market-wide stewardship,” which includes participation in efforts to actively be involved in the development of regulation, global standards and improved data, while also building sustainability literacy by educating stakeholders.
“To address the major sustainability challenges of our time requires us to address systemic risks,” according to the note, Marketwide stewardship for sustainable outcomes. “Systemic risks are risks that are so material that they threaten the continued smooth and sustainable operation of the economy, our society and even the planet.”
They add that the scientific evidence of systematic risk is overwhelming. “The connection between these risks and the health of the economy has also been clearly established.”
In discussing its responsibilities as an asset manager – to assess immediate and clear risks, but also second and third order effects which can’t be managed by diversification. “Avoidance and myopia are most likely to only speed the materialization of environmental systemic risks,” they write. “Our approach to systemic risks stems from our conviction that it’s strongly in the interests of our clients that we act to try to avoid or weaken the materialization of those risks as swiftly as possible by using the levers at our disposal.”
