Before the lockdown, investment into greener projects was meager, but since the world has realised the importance of our planet, this is changing.
South Africa (26 October 2020) – It is hard to see a silver lining from COVID-19 in the light of the economic and social devastation,. Still, if it has changed the way the private sector invests, it could accelerate a greener road to economic recovery.
The topic of Environmental, Social and Governance (ESG) investing, also known as responsible investing was gaining traction before the COVID-19 crisis, but now COVID-19 has an added sense of urgency. Where sustainability in many investment portfolios found environmental projects to fund, social, and governance took a back seat. COVID-19 has highlighted and accelerated the need for investment in social justice.
Many South African companies and foundations supported social investment before COVID-19 due to the social divide and poverty within the country; however, COVID-19 has brought both social and governance investment to the forefront of all investment minds. Companies have had to change their models, their investment portfolios and redefine their purpose.
COVID-19 has exposed human greed, overconsumption and lack of awareness about how dependent and interconnected everyone is to each other in the world. It has forced instant investors mind shift and acceleration on ESG investing in their portfolios.
According to the Credit Suisse Global Investment Returns Yearbook, the question arose around ESG investment – does this means lower returns for the price of principles. The data however, clearly answers that investing responsibly and in a collective power produces higher returns. This data is summarised in the article; COVID-19 offers historic opportunity to build-back-better through responsible Investment in the 2nd Annual Review of South African Philanthropy.
The Annual Review of South African Philanthropy is published by the Independent Philanthropy Association South Africa (IPASA) with the purpose to raise awareness of the work of South African philanthropy. The Annual Review will be launched at a virtual discussion on the future role of philanthropy in South Africa on the 3 November.
At this year’s annual IPASA symposium, taking place from the 3 – 4 November, ESG investing will be one of the focal point discussions, engaging with asset managers, investors and foundations on how the strategic imperative of ensuring responsible investing in the future of South Africa.
“There is a real mindset shift taking place as more people are realising that in order for economic prosperity to be sustained, it needs to coexist with societal and environmental prosperity. Through these debates, we hope to create awareness and build contextual understanding of the shared importance of people, the planet and profit, thereby enabling foundations and companies to make responsible and sustainable investment choices” , Maxine Gray, Wealth & Investment, Investec.
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