In a recent Standard Life Investments publication I discuss how the EITI contributes to a better investment climate. With the growing importance of commodity stocks and the move by extractives companies to source production in countries with higher risk profiles, the EITI's role has become increasingly important.
From the article:
Standard Life's Investors regularly evaluate a number of risks which could impact on their investments, whether economic, financial, or increasingly political. It is clear that certain companies operating in areas of political instability, or in countries suffering from violence, bribery and corruption, face business risks that can significantly affect their commercial prospects and thus returns to investors. Companies in the extractives industries - oil, gas and mining - are increasingly subject to these problems as they move to source more production from assets in countries with higher risk profiles.
Over eighty global investment institutions, which in June 2008 collectively managed over $14 trillion of assets, have therefore seen it in their interest to support the Extractive Industries Transparency Initiative (EITI).
The full article can be downloaded as a pdf.