The ESG Investment Tune – How Organisations should move to this Beat
7th May – Global Compact Network Malaysia (GCMY) in collaboration with Nottingham University Business School (NUBS) co-organised a webinar featuring Tim Gocher, CEO of Dolma Impact Fund and Honorary Professor at NUBS on the topic “ESG Investment Tune – How Organisations should move to this Beat”.
- Environmental, social and governance (ESG) criteria are a risk management tool that help organisations identify and mitigate threats to business. If organisations ignore the ESG baseline, the loose ends will come back to bite them. (ESG = do no evil)
- Impact investment differs from ESG in that it goes above and beyond risk management; as it looks at social and environmental benefit as opposed to risk mitigation per se. (Impact Investment = do good)
- There exists a spectrum in the impact investment landscape that ranges from investors with an “Impact First” approach, i.e. willing to accept low returns as long as positive impact is delivered; to those with a “Finance First” approach, i.e. prioritising relatively high returns along with positive impact.
- Impact investment and ESG fund managers can use the Sustainable Development Goals (SDGs) framework to measure the impact of their portfolios as the SDGs are a comprehensive and flexible framework.
- Gender equality is a metric that is becoming increasingly important to investors from Australia, USA, and Western Europe.
- Maximising shareholder value has evolved from satisfying the greed of short term-oriented shareholders to safeguarding the wellbeing of a broader set of stakeholders, which will inevitably benefit the shareholders in the long-term.
- The availability of impact capital is on the rise, due to low interest rates in developed countries forcing investors there to invest in emerging markets to gain higher returns.
- Investors can undertake an offensive investment strategy during the Covid-19 crisis by targeting sectors that are growing during the crisis such as the tech and healthcare sector; and V sectors that are to bounce back strongly after the crisis such as the education, agriculture, and manufacturing sectors.