Dear members and friends of FCLTGlobal,
Investors and companies have contended with disruptions on many fronts in 2022 – the ongoing recovery from COVID-19, turbulent geopolitics, and rising inflation chief among them. In this moment, rewiring capital markets to prioritize a long-term vision in the face of short-term pressures is critical for securing the financial futures of savers and communities the world over.
Adapting to uncertainties like these, and delivering strong performance despite them, is necessary to thrive in the years ahead. Businesses and investors need to demonstrate both resilience and agility. But new data from FCLTCompass shows that with short-term pressures mounting, companies and investors are finding it more challenging than ever to focus on the long term. Creating tools and fostering dialogue to build these capabilities is where FCLTGlobal has focused our attention over the past year. Most recently, our executive roundtable brought to light the successes and challenges business leaders are experiencing in prioritizing the long-term perspective as they look ahead to 2023.
Expectations of companies are rapidly changing and growing as the role of business in society is more frequently called into question. Meeting those expectations will determine how a company fares over the long term. We know – and research shows – that companies that invest in a broader group of stakeholders outperform over time. Firms that paired a commitment to stakeholder issues and strong performance on material ESG measures generated higher returns, higher sales growth, and lower volatility in returns than firms that did not.
Shifting priorities – including a focus on climate change – also bring meaningful opportunities for growth as industries make the transition to a greener future. Forward-leaning companies and investors are already adapting to seize this opportunity.
Responsible governance, appropriate incentives, and robust investor-corporate dialogue around social and environmental issues are foundational to creating a good business for the long term. For investors, integrating material sustainability-related factors helps build portfolios that will stand the test of time. For companies, strong performance depends on being well-positioned to capitalize on changing circumstances. For both, creating and protecting long-term value requires consideration of the implications of climate change and societal shifts for their businesses.
The last several years have presented many challenges, and the year ahead will undoubtedly do so as well. Navigating the short term while staying on track for long-term performance is the goal. We think of it as keeping your head up, eyes on the destination, but always steering clear of obstacles to create long-term value.
In this environment, our mission remains as critical as it was when we founded FCLTGlobal over six years ago. I want to thank our membership, now 77 strong across 14 countries, for pursuing the ambitious goal to focus capital on the long term. I am confident that the FCLTGlobal community will continue to grow and work toward improving capital markets in order to build savings, wealth, and stronger communities. We appreciate, as always, your meaningful efforts and ongoing support.
Sincerely,
Sarah Keohane Williamson
Chief Executive Officer, FCLTGlobal
Report
5 December 2022 - FCLTCompass is an annual benchmarking tool tracking long-term investment behavior on a global scale. The results of the latest analysis suggest that investment horizons receded in 2021 due to global disruptions such as inflation and COVID-19 recovery efforts.
Toolkit
15 November 2022 - In November 2022, FCLTGlobal partnered with GIC to bring its unique roundtable meeting format to GIC Insights 2022.
Strategy | Report
17 January 2022 - What does it take to earn a return from implementing a multi-stakeholder strategy and offer a rebuttal to skeptics? To answer this question, we turned toward empirical analysis, comparing the characteristics and performance of companies pursuing various stakeholder-oriented strategies.