PODCAST | Understanding additionality in ESG investing
Listen to the first episode in a six-part series, which unpacks key insights from the groundbreaking Sanlam ESG Barometer report
By effectively including and implementing environmental, social and governance (ESG) in business strategy, South African businesses can become more attractive for foreign investment to boost economic growth. That’s according to the 2023 Sanlam ESG Barometer report, published earlier this year in partnership with Business Day.
Researched by Krutham (formerly known as Intellidex), the Sanlam ESG Barometer is first study of its kind in SA to evaluate the current state of ESG and assess how JSE-listed companies are changing their businesses to deliver improved ESG outcomes that will benefit society in the long term.
The key insights from this report will be unpacked in a six-part Sanlam ESG Barometer podcast series hosted by Andile Khumalo, CEO of KhumaloCo and the report's co-founder.
In the first episode (below), Khumalo is joined by Krutham chair Stuart Theobald and Abel Sakhau, group chief sustainability officer at Sanlam, to discuss the concept of additionality in ESG investing.
Additionality — which refers to a positive impact or outcome that would not have otherwise occurred without specific capital investment — is particularly pertinent in SA where important strategic factors such as just energy transition need to be factored into investment decisions.
As Theobald puts it: Investors can approach ESG investing by allocating their portfolios to companies that are above average in their ESG performance, but if their investment choices are driven by wanting to achieve ESG additionality, they would want a portfolio of companies that are driving real change in the world.