Picture: 123RF/ SEBASTIEN DECORET
Picture: 123RF/ SEBASTIEN DECORET

In this edition of Business Day Spotlight, we talk about the rise of environmental, social and governance (ESG) or sustainable investing.

Host Mudiwa Gavaza is joined by Kingsley Williams, chief investment officer at Satrix, one of SA’s biggest providers of index-tracking investment solutions.

ESG investing refers to a class of investing that is also known as “sustainable investing.”  Williams explains that ESG falls under the broader umbrella of sustainability.

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According to McGill University, sustainability is the concept or idea of “meeting our own needs without compromising the ability of future generations to meet their own needs”.

Business Day Spotlight host Mudiwa Gavaza. Picture: DOROTHY KGOSI.
Business Day Spotlight host Mudiwa Gavaza. Picture: DOROTHY KGOSI.

Williams says sustainability has become a catch-all phrase for “doing good” and investing responsibly. Under this umbrella sits ESG, which specifically focuses on how environmental, social and governance effect a company’s operational efficiency and future strategic direction.

He details Satrix’s approach to ESG investments, with the asset manager having recently launched new funds geared towards this philosophy.

The discussion focuses on the distinction between sustainability and ESG; the rise of ESG investing; the rationale for investing in ESG funds; reason why people might invest in ESG index strategies; and whether the trend is here to stay.

As with the introduction of the international accounting standards after the Great Depression in the early part of the 20th Century, Williams believes ESG investing is here to stay and can only grow from this point.

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 Business Day Spotlight is a MultimediaLIVE production.

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