SATRIX SUPPORTS SUSTAINABLE INVESTING
Sustainable investing is not just a trendy investment term. It has been around for many years and is hugely important for the health of our planet, our people and our animals. Investors have a growing desire for investing responsibly and for their portfolios to reflect good environmental, social and governance principles.
Satrix supports The Global Goals for sustainable development.
"The 17 global goals have the power to create a better world by 2030, by ending poverty, fighting inequality and addressing the urgency of climate change. Guided by the goals, it is now up to all of us, governments, businesses, civil society and the general public to work together to build a better future for everyone." ~ GlobalGoals.org
SUSTAINABILITY VS ESG
Sustainability has become a catch-all phrase for "doing good". Under this umbrella sits ESG, which specifically focuses on how the areas of environmental, social and governance impact on a company’s operational efficiency and future strategic direction.
WHAT IS ESG?
An acronym we use too easily, ESG stands for Environmental, Social and Governance metrics as they pertain to good investment practises. These concepts, employed as metrics to measure how efficiently companies incorporate the principles, have been gaining popularity over the past few years. COVID-19 has seen these practices accelerate. Measuring data which relates to ESG allows investors to measure intangible ESG corporate assets which increasingly have an impact on areas such as brand value and reputation. Whilst these measures fall under the umbrella of sustainable investing, they do not pertain to new modes of investing like green or impact investing. Rather they are measures to see how companies are progressing in their efforts to improve these specific areas of focus.
Environmental metrics cover themes such as climate risks, natural resources scarcity, pollution and waste, and environmental opportunities.
Social metrics include labour issues and product liability, risks such as data security, and stakeholder opposition.
Governance encompasses items relating to corporate governance and behaviour such as board quality, diversity and effectiveness.
WHY INVEST IN ESG FUNDS?
Sustainability considerations can contribute to a company’s long-term financial performance, and thus further incorporating these considerations into the investment research, portfolio construction, portfolio review and stewardship processes can help enhance long- term risk adjusted returns and portfolio resilience. Even before the COVID-19 crisis, governments, businesses and investors were beginning to reassess certain personal and community values. It is possible to measure these values and intentions by incorporating ESG metrics into the investment process. Studies are now starting to reveal that companies that exhibit characteristics of resilience have focused on things like job satisfaction the strength of customer relations, or the effectiveness of a company’s board.
SATRIX GLOBAL ESG ETFs
Satrix listed two new global ETFs on the JSE on 10 September 2020. They offer global equity exposure across developed or emerging markets, and enable investors to pursue their ESG objectives.
Please click for details on each ETF:
Developed markets: Satrix MSCI World ESG Enhanced ETF
Emerging markets: Satrix MSCI Emerging Markets ESG Enhanced ETF
POSTED : 9 SEPTEMBER 2020