Lo­cals are keen to in­vest in sus­tain­able firms

Saturday Star - - P E R S O N A L - MARTIN HESSE |

SOUTH Africans ap­pear to be keen to in­vest in sus­tain­able com­pa­nies and have a height­ened aware­ness of sus­tain­abil­ity is­sues, but say they need more in­for­ma­tion from ad­vis­ers and fund man­agers about in­vest­ments that fit the cri­te­ria for sus­tain­abil­ity.

These are a few of the find­ings of the Schroders Global In­vestor Study, a sur­vey by global as­set­man­age­ment com­pany Schroders of more than 22 000 in­vestors across 30 coun­tries, the re­sults of which were re­leased this week. The South Africans polled in the sur­vey (335 peo­ple with in­vestable as­sets of more than e10 000 or about R170 000) had a rel­a­tively ac­cu­rate idea of what sus­tain­able in­vest­ing is, with 62% say­ing it is “in­vest­ing in com­pa­nies that are likely to be more prof­itable be­cause they are proac­tive in pre­par­ing for en­vi­ron­men­tal and so­cial changes”.

Over half of them (55%) said they of­ten in­vest in funds that con­sider sus­tain­abil­ity fac­tors rather than those that don’t, with sus­tain­able in­vest­ments rep­re­sent­ing 45% of South Africans’ in­vest­ment


port­fo­lios. Jes­sica Ground, global head of stew­ard­ship at Schroders, says the sur­vey un­der­lines the surge of in­ter­est in sus­tain­able in­vest­ing glob­ally, but es­pe­cially in South Africa. “The study con­firmed that 88% of South African in­vestors in­di­cated that sus­tain­able in­vest­ing is more im­por­tant to them now than it was five years ago, com­pared with 76% of in­vestors glob­ally.

“This in­creased im­por­tance was ev­i­dent in terms of as­set al­lo­ca­tion, with 76% of South African in­vestors hav­ing in­creased their al­lo­ca­tion to sus­tain­able in­vest­ments over the past five years, com­pared with a global av­er­age of 64%.”

Ground says younger peo­ple, par­tic­u­larly the “mil­len­nial” gen­er­a­tion, are more likely to have in­creased their ex­po­sures to sus­tain­able in­vest­ments over the past five years, with 71% of 18 to 24-yearolds and 75% of 25 to 34-year-olds hav­ing in­creased them glob­ally. How­ever, in­suf­fi­cient in­for­ma­tion is a ma­jor ob­sta­cle for South Africans want­ing to put their money into sus­tain­able in­vest­ments – 70% said there was a lack of in­for­ma­tion on sus­tain­able in­vest­ments, both on how fund man­agers en­gage with the com­pa­nies they in­vest in and from fi­nan­cial ad­vis­ers on which funds to choose.

Ground says South Africans ap­pear to be driven towards sus­tain­able choices by a ten­dency to sup­port lo­cal busi­nesses, while avoid­ing con­tro­versy. “While the ma­jor­ity (65%) of­ten or al­ways pre­fer to sup­port lo­cally pro­duced prod­ucts and ser­vices (com­pared with a global av­er­age of 53%), 71% said they of­ten/al­ways avoid busi­nesses with a track record of con­tro­versy, com­pared with a global av­er­age of 56%.”

Is­sues on which South Africans feel the most strongly are: end­ing bribery and cor­rup­tion (8.9 on a scale of 1 to 10), re­duc­ing pol­lu­tion and us­ing re­new­able en­ergy sources (8.1); and cli­mate change (8.0).

One way you can find out which fund man­agers sup­port sus­tain­able in­vest­ing is to com­pare the com­pa­nies they in­vest in with the com­pa­nies that make up the FTSE/ JSE Re­spon­si­ble In­vest­ment Top 30 In­dex.

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