Aus leads Asia on CSR: Blackrock

Discussing the high profile issue with ANZ CEO Shayne Elliott on video, Bennett said Australian companies are quite well placed with their grasp of social issues. However she added Asia was behind as it dealt with the relatively new expectations of offshore investors in their markets.

"I think [Australia has] good-quality boards that understand stakeholder issues.” - Bennett

“I think [Australia has] good-quality boards that understand stakeholder issues,” she said.  “They're not simply focused on short-term returns to shareholders.”

“In Asia it's quite different because a number of companies have block shareholders - either family or state. We're at very early stages of engaging with a number of companies on these issues.” 

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“Having said that, there is a lot of innovation around environmental issues,” Bennett said. “Particularly around renewable power [development] - there are a lot of opportunities there as well.”

Elliott has long said large organisations like banks must take a stand on community issues because their actions inevitably have an impact on the communities in which they operate.

There is also a shareholder benefit: Bennett said if those issues are managed well, companies are likely to perform better in the longer term financially anyway.

“It can be used as a force for the good but it's also to drive long term sustainable returns,” she said.  

Bennett said boards needed to understand how important social issues were to the intangible value of businesses and that value will continue to grow as a percentage of total business value. 

“Research shows in 1975 around 20 per cent of the [total] value of listed companies was intangible,” she said. “It is now around 80 per cent and that needs to be acknowledged by boards.”

“They need to understand where those value drivers are - is it intellectual capital, human capital, social capital - and to ensure that capital is managed and the value enhanced in the longer term for shareholders.”

The conversation also touched on the impact of climate change and talent management on listed companies. Watch the video above to find out more.

Shayne Elliott is CEO at ANZ & Pru Bennett is Head of Investment Stewardships at Blackrock.