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Social Responsible Investment and its spinoffs; Benefits to Members

Social Responsible Investment and its spinoffs; Benefits to Members. Facilitator: Mothobi Seseli Panellists: Themba Mfeka, Dave Crawford & Aubrey Matshiqi Date: Tuesday, 20 th August 2013, 11h25 – 11h55 . What is it ? Sustainable investing.

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Social Responsible Investment and its spinoffs; Benefits to Members

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  1. Social Responsible Investment and its spinoffs; Benefits to Members Facilitator: Mothobi Seseli Panellists: Themba Mfeka, Dave Crawford & Aubrey Matshiqi Date: Tuesday, 20th August 2013, 11h25 – 11h55

  2. What is it ? Sustainable investing • This represents an amalgamation of different terms that have evolved over the past 30 years, including socially responsible investing and responsible investing. • An investment approach that takes into account actual returns balanced against externalities (unpriced costs or benefits). • What about fiduciary obligation – what constitutes fiduciary duty – to include concerns about intergenerational fairness? Finding balance between short and long term considerations. • As at January 2013, there is a combined US$ 13.6 trillion** in seven regions incorporating ESG into investment selection and management, which is 21.8% of the funds under management in the regions surveyed. (**Source: GSIR 2012)

  3. Why ? • What is triggering this thinking or this approach now? • What will impact investment performance generation in the medium to long term. • Structural shifts - changing economies around the world, changing politics and capital markets, global deleveraging, climate change, impacts of increasing scarcity of resources; population growth (current 7 billion people in the world to increase to about 9 billion in the next few decades) amongst other variables. • Materiality of these shifts.

  4. Climate change example

  5. How do you give effect to this approach There are different strategies of sustainable investing, which list is not exhaustive; Screening of investments (negative/positive/ norms based screening - against minimum standards of business practice-based on international norms Corporate engagement or shareholder action using shareholder power to change corporate behaviour ESG factor integration Incorporating environmental social and governance factors into financial analysis Sustainability themed investing Such as investment in themes or assets related to sustainability such as green technology Impact / community investing Targeted investments aimed at solving social or environmental problems.

  6. Breakdown by type of strategy Global empirical evidence

  7. What are the spinoffs for members • What are the benefits for members from this approach • What are the challenges?

  8. Discussion and Questions

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