Sustainability and Social Impact Investment is getting a lot of coverage. It’s the new big thing in investing. The big banks are getting behind it, the big entrepreneurs are too.
I can think of few things more Hindu than sustainability. So how can you do it? Especially when the City and investment has so much power to shape our world.
Well, you could exclude certain groups such as weapons, tobacco, alcohol, gambling companies. That’s common. But even here people would say they disagree with some issues there.
You could focus on companies who have ESG ratings, that is Governance, Social and Environmental factors. And you could say you will only invest where the social impact is measured. This is something a company I work with does using blockchain – www.worldwidegeneration.co and also another one www.finboot.com which for instance makes sure your clothes have not been produced by slave or child labour using blockchain to track.
Yes it’s small. Some say impact investing is $500 billion worldwide whilst $75 trillion is the value of all stock exchanges.
The good news is you have so much demand and will be on trend doing it because we know from UN Sustainable Development Goals, and scandals like VW, Enron, BP that these issues are no longer ignored and forgotten – or indeed Bhopal – but that has still been largely forgotten (Dow Chemicals owns the company which was responsible for the Bhopal disaster).
The good news is it’s also good for your pocket: Systematic reviews of the literature
conclude that integrating sustainable factors either improves financial
returns, or causes no detriment to them, across all asset classes.” According to Professor Timo Busch, in 2017, from School of Business, Economics and Social
sciences, University of Hamburg.
And we know from disasters that investors will punish companies who do not comply – just look at the share prices of Equifax, Valeant, Vale, VW after their respective failures of governance. Yes indeed, it’s not sustainable.
Covid has reminded us all that our food supplies, our living conditions, our modes of transport, our ways of working, they are all killing us. It’s time for change.
