Investors should Consider ESG in Investment Decision Process
Multi-specialist asset manager, Stanbic Investment Management Services (SIMS) has advised investors and investment firms to keep environmental, social, and corporate governance (ESG) considerations high on the agenda when making investment decisions.
Speaking at a webinar on the theme ‘Investing Right, Investing for the Future: A Case for Applying ESG Principles Now’, Kwabena Boamah, Chief Investment Officer of SIMS said even though the investment community has kept ESG considerations on the backburner for so long, it is time to give it priority in the investment decision process.
“Over the years, investors have focused on returns and security of investments, however, there is an overarching need to add another cardinal consideration in the investment process and that is how investment companies’ investment activities impact the society, the environment and what corporate governance structures are being practiced,” Kwabena Boamah said.
“It is time investors look beyond their returns and also consider the effect of the business on the environment, how the business addresses social issues, and the application of corporate governance while generating its profits. Even though investors may not see the immediate returns of investing for social good, the medium to long term benefits provide sustainable returns and benefits that go beyond just the investor to the community and the nation,” he added.
Thomas Kwesi Esso, Executive Secretary of the Chamber of Corporate Trustees of Ghana, who was also on the panel at the Webinar said the due diligence they expect investment companies to do in making investment decisions should go beyond just financial and include ESG consideration. “When companies are doing their due diligence in making investment decisions, we expect them to go beyond looking at their bottom lines and consider the sustainability issues that the companies they are investing with have in place. That is why our investment guidelines have limitations with regard to the equities they can invest in.”
The SIMS webinar on ESG also hosted Matthew Boadu Adjei, the Chief Executive Officer of Oasis Capital. The webinar is part of a series of engagements organized by SIMS that bring together experts from the pensions and investment ecosystem to engage the public on critical issues relative to investment.
SIMS is Ghana’s foremost investment management and advisory firm offering tailor-made fund management services for pension schemes, institutions, corporates, and associations to meet specific investment objectives and return benchmarks. SIMS’ institutional and individual fund management proposition includes assistance in setting up the fund, investment policy statement design, templates for trust deeds, and fund rules.
The firm also offers fund management services to high net-worth individuals seeking specific investment goals such as educational funds, retirement funds (individual/private pension planning), trust funds, and endowment funds.