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Investing in peacebuilding: how one fund is seeking to address SDG16

SDG16: Peace, justice and strong institutions, is arguably more abstract and subjective than many of the Goals, and it isn’t at the top of investors’ list of priorities – or demands for investment strategies. Most responsible investors exclude controversial weapons as standard, but, so far, that’s been about it.

“It’s quite ambitious to talk about peace in a fund,” admits Dominique Habegger, who started his career in responsible investment with SAM (now RobecoSAM) back in 1996.

But that is exactly what he is doing in his current role at Pury Pictet Turrettini, where he runs the Cadmos Peace Investment Fund. (…)

Antoine Mach, Managing Partner & Co-founder of Covalence, which worked with PeaceNexus to develop the index, says it is based on conventional ESG criteria alongside “peacebuilding business criteria”.

“This is probably the most original part,” he says. “We look at how companies can contribute to stability, good governance and construction of peace, for example, through their hiring practises; how they create jobs. Do they create jobs only for the majority ethnic group in one country or do they have more conflict sensitivity and try also to integrate into their workforce? And do they have a similar approach with the supply chain management? We look at how companies work with suppliers. Anti-corruption and tax transparency are also very important in terms of contributing to democracy and to good governance in those countries.”

Google, for example, meets the peacebuilding criteria because of its regional search advertisements depicting friendships between neighbouring countries India and Pakistan, which have been engaged in hostility since the 1947 Kashmir conflict.

Nestle sources agricultural crops from a social enterprise that provides jobs to young people in the north of Nigeria “that could otherwise be tempted to join terrorist groups like Boko Haram,” says Mach, adding that this information wasn’t found through Nestle’s communications, but in the Stanford Social Innovation Review. “Sometimes companies are not aware that they are contributing to peace in different areas and we’ve helped them realise that role,” he suggests. (…)

Covalence’s Mach says that Facebook is an example of a company with both positive and negative impacts: “Bad guys are using Facebook to spread hate speech – for example, in Myanmar with the Rohingya Muslims – but a lot of good people, like human rights organisations and democractic groups, are also using Facebook to promote freedom and human rights, and to work together to improve the state of society. So we are very excited,” he tells RI.

Asked how a “peace fund” could justify financing oil majors, whose role in political instability, conflict and the climate crisis is well documented, Mach says: “We’re okay to invest in certain companies that are not ideal, that may face controversies, but we also think they have a peacebuilding potential.”

“The engagement component has a lot of importance here,” he continued. “You don’t want to engage only with the leaders, it’s important to engage with companies that have some room for improvement too.”

“Companies are happy that we engage with them. We don’t come with the stick and say: ‘You are bad guys’. We say: ‘Look, you’re one of the 30 companies in the Peace Fund – you’d better do something, or you’re going to be out’.” More…

Source: Responsible Investor

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