Investment information: Exclusive and protected

The investment industry is, for good reason, extremely careful about the way that it handles, uses and transfers information. For both commercial and investor protection reasons, rigorous safeguards exist to ensure that information is only communicated by appropriate people through appropriate channels to appropriate recipients.

These important controls, however, can have the unintended consequences of making the investment research process unchallenging, sterile and exclusive.

Social media: Inclusive and unprotected

In contrast to the centralised and highly-controlled processes used for investment communications, social media technology enables every individual to share information and express their opinion directly to a potentially global audience; it emphasises mutual benefit and enables collaborative thinking and working.

Social media increases massively the diversity of experiences and perspective that can be brought to any situation and is, therefore, rapidly becoming a hugely valuable research tool. This challenges the communication processes of many areas of society and business and it challenges most those activities (such as investment) where communication is most centralised and most controlled.

Social media technology also accentuates issues around:

  • The privacy of personal information
  • The boundaries between collaboration and competition
  • Intellectual property and copyright protection

The investment industry and social media

To date, the investment industry has largely reacted to social media by prohibiting its employees from using it for professional purposes – because they do not yet have appropriate mechanisms for policing it. Ultimately, however, the technology is here and cannot be put back in the box; forbidding its use is like forbidding the use of Google searches – such a situation is clearly unsustainable in even the medium term.

The industry will soon have to learn how to adapt its controls and policing mechanisms to ensure that they are appropriate for a world in which social media becomes one of the principal forms of interaction.

These new controls are unlikely to be based on the mechanistic approach that the industry has used to date (appending pages of never-read disclosure, disclaimer and compliance information to every communication); instead it will have to educate employees on why and how to self-regulate their engagement through social media.

Sustainable and Responsible Investment: Towards inclusivity

For twenty years, SRI research has fought against narrow-mindedness and exclusivity in investment research and the industry has argued that wider social, environmental and economic factors deserve consideration in the processes of making investment decisions and presenting investment products; the industry has also argued that investment research should draw on the widest possible range of experience (from company employees, NGOs, environmental scientists, local communities etc.) these processes.

Whilst doing this, however, it has always been careful to abide by all relevant investment compliance controls and so, as these controls change in shape, so SRI will need to adapt to their new format.

SRI-CONNECT: Inclusive AND protected!

In bringing the benefits of social media to the SRI industry through the SRI-CONNECT site, we are conscious that SRI professionals need protection when using the site in order that they can fulfil their responsibilities towards other users and their wider stakeholder base.

In particular, we recognise we have responsibilities to users relating to:

  • Investment compliance
  • Privacy of personal information
  • Competitiveness
  • Intellectual property and copyright protection

This ‘Conditions of Use’ document details specific policies on each of the above factors within plain language explanations. It aims to ensure that all users should be able to:

  • Interact with the site; and
  • Reap the benefits of its social media components without contravening any of the essential investment, privacy, competitiveness or reputational safeguards imposed by their employers.

We recognise that users may, at first, be cautious about using social media technology for investment purposes and, in particular, will be wary of the potential for breaching their obligations to their employers or clients in respect of investor protection or corporate reputation.

This document aims to reassure the least experienced member of the most cautious investment house that they too can make use of our site.