The Principles for Responsible Investment (PRI) and UN Global Compact (UNGC) launched the report on the 20 June 2016. The guidance is based on research involving 34 investors who collectively manage US$2.7tn in assets.
The report highlights the negative impacts of corruption on business, including: slower economic growth, distorted competition, and serious legal and reputational risks. With a dynamic international regularity environment and the growth of extra-territorial legislation – such as the UK Bribery Act – a focus on anti-bribery policies has become increasingly important. The report also argues that robust anti-corruption policies are a “litmus test” for the overall quality of a company’s management. An assessment of corporate governance can therefore be used as a potential indicator of future company performance.
The PRI and UNGC’s research focuses on fund managers investing in listed equities. The framework for engagement may also be useful for private equity investors that take minority equity or debt positions. Furthermore, the research highlights the growing importance that responsible investors place on good corporate governance and the increased exit value that strong ESG integration can add to a portfolio company.
The full guide is available here: Engaging on Anti-Bribery and Corruption.