This investor handbook provides a framework on how institutional investors can incorporate environmental, social, and governance (ESG) issues into investment analysis and decision-making processes. The six Principles outlined in the handbook aim to align investors with broader societal objectives by promoting acceptance and implementation within the investment industry.

Public and sustainable finance policies are increasingly critical to investors due to enhanced financial sector legislative reforms in the wake of the 2008 global financial crisis. Furthermore, governments worldwide have recognised the need to reform financial systems to align with the Paris Agreement and the Sustainable Development Goals. According to the report, incorporating sustainability policies and regulations into investment analysis and decision-making ensures a long-term, responsible approach to investment and supports a sustainable global financial system.

Investors have a significant interest in ensuring that sustainable finance policies and regulations are effective, efficient, support sustainable financial returns and deliver clear social and environmental benefits. A number of sustainable finance policy reforms are proposed in the report, including reforms to investor duties and disclosures, ESG disclosure regulations, stewardship frameworks and regulations, and national/regional sustainable finance strategies.

The report states that industrial policy making is required to guide an economy-wide transition towards the goals of the Paris Agreement. It highlights that industrial policy 2.0 needs to address key risks posed by climate change and its implications for economic and social systems.

The report recommends that investors consult with policymakers to ensure the efficient design and development of industrial policy measures. It is imperative to ensure that such policies are efficient, and that they are designed to best reach the multiple goals pursued by investors in terms of positive sustainability outcomes.

The regulation database, contained in the report, shows policy reforms around the world that address investor concerns about sustainability across the investment value chain. These policies aim to clarify investor duties, provide investors with comparable, standardised data and information on key ESG issues, require investors to disclose how such matters impact investment decision-making and how they act to improve investee performance, among others.

Overall, this report highlights investors’ fiduciary responsibility to act in the best long-term interests of their beneficiaries through the integration of ESG issues into investment analyses and decision-making processes. Incorporating sustainable finance policies and regulations ensures a responsible approach to investment in support of a sustainable global financial system. The report emphasises how responsible investors can engage policymakers and the importance of design and development of efficient industrial policy measures.