From Wall Street to Main Streets across America and in all corners of the world, the financial crisis and economic recession are taking a heavy toll. Yet extraordinary opportunities are arising from the wreckage.
What President Obama calls “the new era of responsibility” is stimulating a widespread shift from the short-term opportunism that has ruled the markets—and the country—toward long-term strategies to balance rewards and risk, which could create a more accountable and sustainable future for everyone. Recent actions have particularly favored improving energy resources, the environment and U.S. competitiveness.
This Special Report seeks to provide insights on the two main areas that we see opportunity for investors: an opportunity to make meaningful and lasting reforms in financial market and corporate governance practices and an opportunity to identify and leverage the investment themes that are likely to lead our economic recovery.
There is broad consensus that stronger corporate governance and regulatory oversight could have prevented the current situation. At Calvert, we are intensifying our support for proposals that can rebuild investor confidence and public trust, such as:
- Ensuring that financial product creators disclose, address and retain responsibility for their products’ risks.
- Strengthening the effectiveness of the Securities and Exchange Commission and other regulatory agencies.
- Curbing excessive executive compensation.
- Strengthening accountability to shareholders.
- Promoting greater transparency and disclosure for both financial and environmental, social and governance (ESG) issues.
- Supporting a healthy balance between short-and long-term perspectives.
Even in a recession, attractive investment opportunities can be found. And that’s even truer today—in the face of historic government spending to stimulate the economy, the White House’s advocacy for a “green” recovery, and other policy changes to address some of the most pressing issues facing our country today.
As a leader in sustainable and responsible investing (SRI), Calvert is uniquely positioned to assess and influence the seismic shifts that are currently underway. Here are the opportunities we see:
First, the heightened focus on energy and the environment is driving growth in renewable and alternative energy investments.
Also, we see two broad themes investors can leverage in their portfolios:
- In equities, a focus on high quality companies, which appear to be weathering the downturn better
- In fixed income, unique total return opportunities are emerging from the fixed-income landscape
Finally, we expect investors to benefit from several other areas—including government initiatives aimed at replacing crumbling infrastructure, decreasing health care costs and improving K-12 education.
Overall, we are encouraged by the rays of light we see among the gloom. And we believe there are attractive opportunities for investors, companies and the country in the months and years ahead.