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On Monday 19th April we held a joint meeting with UKSIF (UK Sustainable Investment and Finance Association) to explore with socially responsible investors the opportunities and potential risks which may arise from the use of nanotechnologies.

The event was hosted by Henderson’s Global Investors (our new steering group member) at their offices on Bishopsgate in the City of London.

The programme featured a whirlwind tour through the many applications areas for nanotechnologies from Dr Alan Smith, followed by perspectives from the public from Rob Reid of Which?, as well as a review of progress with regulation of nanotechnologies. David Baxter of Lloyd’s reviewed the status of nano from an insurance perspective and Rachel Crossley, previously of Insight Investment, explored the issues from the point of view of a responsible investor and outlined a potential response for companies and investors in the form of the Responsible Nano Code.

Although some investors there, such as Henderson’s, had done a significant amount of work considering these issues, most had some awareness of nanotechnologies, but were unsure how to assess companies’ involvement with them or engage with companies to promote responsible behaviour.

Four things sprang out of the meeting for me:

1. Opportunities are unfocused and poorly communicated to key audiences

• Opportunities to invest in the nanotechnologies either direct in nanomaterials companies or others using it extensively, do not appear to be sufficiently well articulated by the government, companies or others keen to promote them.
• Certainly the socially and environmentally beneficial applications highlighted by all our speakers came as a surprise to many attendees at the meeting – they were more aware of potential risks than they were of where it could make an important impact. As we saw from the UK Government Nano Strategy there is no consistent focus to the government’s approach and funding strategy priorities.
• Certainly the new government needs to get its act together sharpish to coordinate a strategic research, development and commercialisation effort to ensure that nano is supported, especially where it can help to solve some of society’s most pressing problems. And of course to engage with stakeholders to develop that strategy and communicate the outcome!
• However, we are then faced with the problem of nano not really being an industry, but an enabling technology, making it more tricky.

2. Investors don’t know what questions to ask about risk

• There remain some real questions about risks, and the chronic lack of information, even about the safety and testing of products already on the market, became clear yet again. Though early indications are that there are not too many scary safety problems ahead of us, these hurdles need to be addressed quickly. Businesses need to be more open about their testing and governments need to focus their funding into clear HSE priorities.
• Many of the investment analysts said they would like to engage more on this issue, but did not know what questions to ask of companies about their use of nanotechnologies to give them confidence that risks are being addressed. However, they responded positively to The Responsible Nano Code which provides analysts and others with a sensible basic framework for their engagement with companies.
• There were interesting tales of data sheets for nano materials which cited research only on the bulk material, carbon nanotubes categorised as graphite and where new and enhanced properties brought about by nano were not mentioned – which ratcheted up the concern a bit further.
• The idea put forward by Rachel Crossley that investors could form a group to promote the adoption of the Responsible Nano Code by companies and engage with them on their management of nanotechnologies was greeted by some nodding heads. A benchmarking framework has already been produced and only needs basic funding to go ahead. We are exploring trying one more time to get funding for this.
• We are also considering using the Responsible Nano Code as a basis for a Code on Emerging Technologies, as many, if not all, of the Principles are as relevant to other technologies as to nanotech. I would be interested to know if anyone has thoughts on that idea.

3. Companies need to communicate with us all about why they are sure these products are safe

• When some of the uncertainties about health and safety were outlined by our speakers, and then correlated to the pile of products on the table Alan Smith had brought in, the obvious question was: Well why don’t the companies that develop and sell these products do more to assure us that they have done exhaustive testing and the products are safe for us to use? A bit of a no-brainer question really in the circumstances.
• It is not really part of the company CSR lexicon to communicate about the safety of their products, the focus of their R&D and the responsible use of their technology. ‘By going on about safety aspects of nano, people will think we have something to hide or there is some concern about all our products and there isn’t’, I was told once. That may have been an issue a few years ago, but the expectation now is that companies will communicate about nano and mystification that if this technology is so safe and useful, why the secrecy?
• We are running a Business Emerging Tech working group, starting shortly, which will explore these issues. I will be interested to hear the rationale from the horses’ mouths, so to speak.

4. Use of new technologies looks set to be an emerging area of corporate risk and responsibility

• But it is growing clearer to me that communicating about how you do R&D, about the safety and testing of your products, and the use of new technologies is an emerging area of corporate risk and responsibility which has not been explored in any particular depth. Back to the Nano Code or the Principles for Emerging Technologies I think!?
• However communicating is tricky, quite a few companies (including L’Oreal who where number 6 in the world for nano patents at one stage), communicate about their R&D etc in their websites, there are often perfunctory references in social reports. Those could be good places to start, even though no-one looks at them!
• Again this will form a big part of the focus of our Business Working Group. This is going to be fun!

Do let me know your own views.