What more can investment managers do to foster sustainable practices ?
Jamil Jiva , Global Head of Asset Management , Linedata : Fostering sustainable practices may come with short-term drawbacks as sustainable practices may be more expensive . However , without investment , we will never get there and at some point , the losses resulting from unsustainable practices will overcome this additional cost .
Investment managers should continue their investment in companies that are investing to enable these sustainable practices . They need to look for them and invest to develop frameworks and technologies to identify the companies that deliver their promises and ensure that the companies they invest in put in place solid governance mechanisms to meet their objectives .
Finally , they need to assess the consistency of a company across , environment , social and governance as well as the way they address the controversies that affect them .
Boris Redfern , Head of Buy Side at Levenue : A very experienced PM at a well -regarded investment management house said something quasi-sacrilegious at a recent round table I attended : “ The phrase ESG is completely outdated , in fact , it ’ s useless . We should be focussing on sustainability .”
Hushed whispers ensued . She was obviously absolutely right , on reflection . ESG is such a broad church and so lacking in specificity that it ’ s fast losing any relevance . We must put sustainability first at the heart of any investment process rather than being slavishly tied to a broad remit like ESG .
Companies without good governance are increasingly rare . Investment managers can actively engage with the companies they invest in to promote sustainable business practices , such as reducing carbon footprints , improving labour practices , and enhancing corporate governance .
128 August 2024