Don’t let politics sway ESG approach
It is important to consider geopolitics within ESG but fund managers should be wary of letting their views be too swayed by politics, according to Stewart Investors, David Gait.
Speaking on a panel at the Lonsec Symposium in Sydney, Gait, head of the sustainable fund group at Stewart Investors, said he was cautious of letting political views affect any investment decisions.
Stewart Investors had been running sustainable funds, especially in emerging markets and Asia, for 20 years and was an early mover into the space.
“We are very keen that sustainable investment doesn’t become painted in a political light, the whole industry needs to be careful about not coming at issues from a political point of view and needs to work hard on that.
“We are very big on not using adjectives because adjectives tend to become quite dramatic and the perception they are coming from a political point of view becomes much more of a risk.”
However, the panel, which also included Jen Driscoll, chief executive of Alliance Bernstein Australia and Tony Adams, head of sustainable investment research at Lonsec, agreed that geopolitics could perhaps become the second ‘G’ in ESG.
This had become even more important in the light of the Russia-Ukraine conflict and issues in China which had gone back into COVID-19 lockdown.
Gait said: “We are not a fan of blanket sanctions. We own pharmaceutical companies that have business in Russia, providing painkillers and inhalers and so on. And we’ve been in touch with them to say we don’t feel they should pull out [of Russia] on behalf of shareholders. In most cases, I think it’s possible to behave responsibly”.
Adams added: “Ultimately, some will buy China, some won’t, some will buy companies with a large family control and some won’t. So long as clear, simple transparency is there to help investors make sure it’s not one size fits all and to help them make the right choice”.
AUTHOR
Laura Dew
Recommended for you
Women are expected to inherit US$124 trillion through the intergenerational wealth transfer, but Capital Group has found they are twice as likely to rely on social media for advice over a financial adviser.
Challenger Investment Management has raised $350 million during the offer period for its new ASX-listed investment structure.
A week after Lonsec downgraded multiple funds from Metrics Credit Partners, rival research house Zenith Investment Partners has opted to retain its ratings for the same funds.
Strong adviser engagement has helped Praemium reach $1 billion in inflows on its Spectrum offering, with a deal with Western Australian wealth firm Euroz Hartleys expected to add as much as $2 billion.
