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”.

Key points:

  1. 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)
  2. 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)
  3. 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.
  4. 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.
  5. Gender equality is a metric that is becoming increasingly important to investors from Australia, USA, and Western Europe.
  6. 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.
  7. 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.
  8. 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.
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