By Andrew Bahlmann
South African investors are awakening to Environmental, Social, and Governance (ESG) investing as a new way of measuring the value of their investments.
It is a new view – one that seeks to balance earning money and taking care of the environment.
Investors have started to think much more about ESG when they decide where to put their money by looking closer at how a business makes money, and in the process gaining an understanding that how a business makes money, how it affects people, and how it takes care of the environment are all interconnected.
This change towards ESG investing in South Africa is part of a bigger change currently occurring all over the world.
As more people become aware of issues like climate change, how people are treated, and how companies are run, they want to invest their money in ways that match their own belief system. ESG investing gives them a way to do that.
It lets people think about not just how much money a company can make, but also how it affects the world.
As awareness grows, ESG-focused funds are garnering more attention because they can make money while also matching what their investors believe in.
Studies show that companies that give high priority to ESG become better at also dealing with changes in the market or changing rules and regulations they are required to comply with.
Also, when people who invest money use ESG to decide where to put their money, they can simultaneously help alter how companies behave and raise their consciousness about care of the environment and how those businesses are run.
ESG-focused funds are seen as a way to make things better.
By putting money into companies that take care of the environment, treat people fairly, and transparent about how they are run, people who invest money can feel they are making a difference in making the future better for everyone.
ESG-focused funds do more than just make money. By investing in companies that take care of the environment and people, these funds are helping to make the world a better place.
They are helping to fight climate change, make things more fair for everyone, and make companies more open and honest about how they are run.
The rules that are in place play a big part in how ESG investing grows. In South Africa, the regulations are changing to make it easier for people to invest their money in ways that are good for the environment and society.
For instance, the JSE has started to employ new ways to demonstrate how companies are performing in respect of ESG.
In addition, the people who design the rules are talking to others to make new rules for how companies have to report on ESG to make it easier for people to see how companies are doing.
These amendments to investment rules are good for South Africa because they make people in the country more amenable to ESG investing while foreign investors become increasingly attracted to South Africa as an ESG-conscious destination for their capital.
As more investors from other countries want to invest their money in ways that are good for the environment and society, countries that show they care about ESG will get a greater share of investment money from other countries, and do better in the world market.
This creates a positive upwards spiral of international confidence and is an extremely good thing for South Africa.
It shows that the country wants to make the economy better for everyone and be a leader in the world in responsible investing.
As more people want to invest their money in ways that match what they believe in, South Africa will get more money and the economy will grow.
ESG investing is a big change in how people think about money: simply making money is no longer the only thing that matters.
In South Africa, using ESG ideas shows that people are starting to understand the problems that businesses and people face.
By using the power of money to make the environment and society better, people who invest money and the people who help them do it are not just making money, but also making the world a better place for everyone.
As ESG investing becomes more popular, it has the power to change South Africa and the world in a big way.
Andrew Bahlmann is the CEO of corporate and advisory, Deal Leaders International. You can follow him on: @DealLeaders @Corpreneur
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