REPORTING ENTITIES ... INVESTMENT PORTFOLIOS
INVESTMENTS ARE ONE OF THE KEY DRIVERS OF THE ECONOMY
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MEASURING PORTFOLIO PERFORMANCE
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Using Financial Rate of Return to Measure Portfolio Performance
The conventional approach to measuring portfolio performance has been growth in the value of the portfolio adjusted for dividends received. The only measure of any importance for most of portfolio management history has been this simple financial wealth proposition. The value is a function of the stock price as determined most often on a stock exchange.
The value of stock on a stock exchange is influenced by the analysis of performance the companies, analysis that is a function of the information there is about company performance ... and mainly the company performance in respect of sales revenues, profits, profit margins and growth.
As long as the bulk of financial analysts and investors think only in terms of financial return, investment decisions will be based on this parameter to the exclusion of other important performance factors.
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In the past great family fortunes have been mobilized to support a range of philanthropic endeavors. Examples are what the Carnegie Foundation did in support of libraries both in the United States and in the United Kingdom and the philanthropy of the Ford Foundation, or the Rockefeller Foundation, and now the Bill and Melinda Gates Foundation ... and tens of thousands of others.
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The idea that business is all about profit and only about profit, and philanthropy is only about philanthropy is something of a dysfunction. It might have been a reasonable way of proceedingin the past, but is by no means optimal for a world where there are emerging issues with society and the environment that also have to be addresses.
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Public companies have been required to report there profit performance in accordance with accounting standards for a very long time, but there is not the same rigor around the impact companies have on society and the environment. There are many initiatives to strengthen the reporting of corporate performance over and beyond the profit performance (see PRI, GRI, IR, IRIS etc below) but these initiatives have not yet reached the stage where they are easy to use and widely accepted.
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INITIATIVES ADVOCATING RESPONSIBLE INVESTMENT
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PAM (Private Asset Management)
Private Asset Management (also known as PAM) is a magazine for the wealth management and family office industry. It is headquartered in London. The magazine is published by Pageant Media on a monthly basis.
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PAM (Private Asset Management)
The May 2017 issue of the Private Asset Management (also known as PAM) magazine. One of the major articles concerns the 50 women who have been identified as the movers and shakers in the investment industry.
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Open external link
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PRI (Principles of Responsible Investment)
ABOUT THE PRI ... WHAT IS THE PRI?
The PRI is the world's leading proponent of responsible investment.
It works to understand the investment implications of environmental, social and governance (ESG) factors and to support its international network of investor signatories in incorporating these factors into their investment and ownership decisions. The PRI acts in the long-term interests of its signatories, of the financial markets and economies in which they operate and ultimately of the environment and society as a whole.
The PRI is truly independent. It encourages investors to use responsible investment to enhance returns and better manage risks, but does not operate for its own profit; it engages with global policymakers but is not associated with any government; it is supported by, but not part of, the United Nations.
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MORE: Open L0500-PRI
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