“Universal owners” get more involved in human rights
This article entitled “The year human rights advocates and investors became unexpected allies” from Open Global Rights is interesting. Here’s an excerpt:
Civil society should embrace this opportunity to partner with these new allies to foster real and enduring change. The basis for this change has been the gradual emergence of the “universal owner.” Universal owners are funds so large they are forced to spread their holdings across all assets and asset classes. “Institutional investors,” pension funds, foundations, insurance companies, and the like constituted only 10% of the U.S. stock market in 1950 but they now account for 70%. Moreover, these funds are very concentrated. The ten largest investment advisors control 37% of the global asset base. BlackRock, Vanguard, and State Street own an estimated 20% of the stock of the average U.S. corporation.
A confluence of trends, marrying the rise of the universal owner with increased regulatory and societal interest in climate change, plus improvements in data and measurement of financial risk — and catalyzed by the pandemic and the George Floyd killing — marked 2020 as a tipping point for investors. They are rapidly recognizing that certain global problems negatively impact the entire economy, and therefore the entire market. One of these is climate change. A 2020 survey of European pension funds found that 54% of respondents considered the impact of climate risk in their investment decisions compared to just 14% the prior year. Underlined by the pandemic and racial unrest, inequality has joined climate change as a perceived threat to the economy and society at large, and the two are now often paired in the same sentence.