The forthcoming G20 Leaders’ Summit on 5-6 September 2013 (pictured above left, credit) will expectedly focus on US President Barack Obama taking advantage of bilateral and multilateral talks at this forum to press the case for intervention in Syria to other world leaders.
Against the urgency of proposed Syrian intervention, however, the Summit does promise to take up quietly equally urgent issues on global economic and regulatory governance. What would be of interest to international lawyers is the Summit’s upcoming consideration of the September 2013 G2O/OECD High-Level Principles of Long-Term Investment Financing by Institutional Investors. These Principles proclaim to
“help policy makers design a policy and regulatory framework which encourages institutional investors to act in line with their investment horizon and risk-return objectives, enhancing their capacity to provide a stable source of capital for the economy and facilitating the flow of capital into long-term investments. The principles address regulatory and institutional impediments to long-term investment by institutional investors and aim to avoid interventions that may distort the proper functioning of markets.”
The Principles are designed to complement existing international ‘soft’ standards and guidelines such as, among others, the United Nations Principles for Responsible Investment, the Santiago Principles for Sovereign Wealth Funds, the OECD Principles for Public Governance of Public-Private Partnerships, and the OECD Guidelines on Multinational Enterprises.
Institutional investors – particularly sovereign-owned or controlled entities – pose unique questions of international responsibility and the attributability of their conduct to their sovereign owners or sponsors. The Principles tacitly accept that institutional investors are not mere passive financiers given their long-term investment horizons and activities across different States. To this end, the Principles call upon States to ensure that institutional investors are “adequately regulated and supervised, taking into account their specificities and the risks they face, and in line with relevant international standards” (Principle 1.6). The institutional investor likewise has the responsibility to “identify, measure, monitor, and manage the risks associated with long-term assets as well as any long-term risks – including environmental, social, and governance risks” (Principle 3.4). Read the rest of this entry…