Authors
Richard Mattison, Mark Trevitt and Liesel van AstResearch organisationTrucost, commissioned byUNPRIand UNEP Finance Initiative
The financial implications of unsustainable natural resource use and pollution by business are assessed. Diversified institutional investors like pension funds, mutual funds and insurers are “Universal Owners” - the long-term owners of large companies that impose significant environmental costs onto the economy. Environmental costs are increasingly financially material – annual environmental costs from global human activity amounted to US$6.6 trillion in 2008 or 11% of GDP. External environmental costs caused by companies can reduce returns to investors. Institutional investors can exercise ownership rights and encourage the protection of natural capital needed to maintain the economy and investment returns over the long-term.