ESG
ESG at Ganita lets you take a more responsible approach to investing,
while still offering the very best for your long-term security.
What is ESG?
‘E’ stands for Environmental, which represents a dedicated focus on the conservation and sustainability of our natural world.
‘S’ stands for Social, and is a focus on the consideration of our people and our relationship with them.
‘G’ stands for Governance, and is a focus on our company standards and our business ethics.
For many, the term “ESG” brings Environmental issues to the forefront of their mind such as Climate Change and Forest Preservation. These issues form an element of ESG – an important one – however, the term holds a much greater meaning. It covers social issues like our company’s labour practices, talent management, product safety and data security. It covers governance matters like board diversity, executive pay, and business ethics.
ESG at Ganita
Our client portfolio will be invested in companies that meet high standards with respect to our ESG values. Our ESG-focused portfolio lets you take a more responsible approach to investment while still doing the best for your long-term security. Ganita follows the principles and values of ESG through the following measures:
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When choosing ESG investments, we will look for funds that invest in businesses that generate a measurable social or environmental benefit alongside a return.
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Due to ESG criteria being broader than traditional ethical investing restrictions, our potential investment opportunities are greater, allowing wider diversification to protect you against possible investment risk.
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Our selection process thinks about the bigger picture and about companies who are doing their best to give something back. We believe this will make them more sustainable, which is good for your investment portfolio. There is mounting evidence that companies that meet ESG standards tend to outperform those that do not.
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The counterargument is also true. Many companies have seen catastrophic repercussions (both ethically and commercially) for acting irresponsibly, and those who do not adapt risk being left behind.
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Clients' investments will benefit from the best of Ganita Wealth Management’s thinking and long-term experience. We monitor and manage your portfolio to ensure your investment risk is kept at a level that suits you through true diversification.
For the above measures, we will use the following approaches:
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Negatively screened investment approaches - known as applying an exclusion policy or as ethical investing.
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Positively managed investment approaches - such as thematic investing or best-in-class investing.
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Impact investing - meaning investments made into companies, organisations, and funds to generate a measurable, beneficial social or environmental impact alongside a financial return.
Why is ESG investing and awareness growing?
There is increasing awareness that material environmental, social and governance (ESG) factors can be tied to a company’s long-term performance. As such, more and more investors are looking to integrate sustainability insights and data into their traditional investment processes. By expanding access to data, insights and learning on material ESG risks and opportunities in investment processes across the board,we can become better overall investors.
Over $22 trillion of assets were managed under responsible investment strategies globally in 2016, up 25% from two years prior. This is one of many statistics showing ESG investing moving into the mainstream.
Some key factors emphasising the shift to the mainstream includes:
Energy sources are shifting
Climate change aside, there is a transformation occurring in energy markets. Well-telegraphed supply and demand drivers are shifting the dynamics of the oil market, natural gas is now cheaper than coal, and renewable energy sources are becoming cheaper and scalable.
We are living longer
With average life expectancy rising in developed countries, sustainability issues will affect not only our children but also our older, less-capable selves. Climate change, income inequality, healthcare and poor governance are increasingly personal as they directly affect financial security in retirement.
Technology is changing what we demand and what we consume
Whether it’s driverless cars in autos, smart metering in utilities, renewables in oil and gas, online sales in retail, or robo-advisers in asset management, most sectors of the economy are seeing paradigm shifts in the way business is conducted. Companies with ample resources and willingness to adapt will outperform, but others are likely to put investors at risk.
Social media is driving convergence in social norms
Given its borderless nature, social media has the potential to alter the cultural blueprint of countries, and for investors, its effects vary from changes in individual consumer preferences and traditional election patterns to subsequent demands for new regulations.
Increasing importance of global value chains
Large corporations’ value chains are increasingly global – as highlighted in our secular forum in May. These value chains are complex and if poorly managed can prove costly. Investors can be quick to punish companies for child labour practices, human rights issues, environmental impact, and poor governance.
Demographics are changing
Millennials and Generation-X are increasingly taking over from Baby Boomers in positions of influence, changing business, financial and political landscapes. The newly formed French government is an example – half of its members are women. Younger generations are driving the fast growth of the “green bond” market and the field of sustainable finance in general.
