Lorem ipsum dolor set amit R Reflections
Rising Demands of the Responsible Investor
Are investors tending to be more concerned about responsible investing in all its forms and, in turn, applying pressure to fund managers to be more responsible in the way they make their investment decisions?
Malcolm Fair, MD of RisCura, believes they are and points to the likes of the Government Employees’ Pension Fund and Eskom Pension and Provident Fund as examples of investors that are concerned about societal factors ranging from the environment to corruption. “They’ve realised that it’s all very well chasing financial returns only for members, but it fails to make sense if the society and environment in which members are taking advantage of that money lacks a social fabric, is unstable, lacks governance and has high levels of endemic corruption. In other words, it’s not a good place in which to use the money they invested.”
He says that while investors who get involved in fund managers’ decisions are still in the minority, there is an increase in participation from investors. “Institutional investors [are now] saying that they don’t want their members’ money involved in controversies and failures. We’ve started getting clients who, despite the discretionary mandate they give to their fund managers, are issuing instructions to say: ‘Please don’t trade in any more of those shares.’ That’s not something we’ve seen in the industry before.”
Azad Zangana of Schroders agrees. “The role of responsible investing has broadened quite dramatically and now we’re not just looking at the stewardship of companies. At Schroders, we’re also strongly focused on the impact on climate change, the impact on sustainable use of energy and other similar factors. I think this is becoming very important – especially for the younger generation who are coming to us as clients. They’re keen to make sure that the legacy of their investment is responsibly looking after the world, as well as responsibly looking after companies.”
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“They’ve realised that it’s all very well chasing financial returns only for members, but it fails to make sense if the society and environment in which members are taking advantage of that money lacks a social fabric, is unstable, lacks governance and has high levels of endemic corruption. In other words, it’s not a good place in which to use the money they invested.”
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