Q: KEVIN JAMES: There’s been a huge exponential growth in the responsible investment sector abroad. We are talking about 64% or so in Europe, about 37% in the United States, North America, a small percent in Australia, a tiny of a fraction percent in Asia, and Africa does not reflect on that radar at all. Why is there such an exponential growth overseas? Has it gone beyond disclosure to performance management? Give us your views on what you are seeing over there in the developed world.
A: GRAHAM SINCLAIR: As a proud South African, let me say that whatever we are doing here in South Africa, I can replicate for you in most other mixed developed/developing markets around the world, and I would consider the US market as developed, but in other parts less developed. We have an active space, an active thematic within asset management that is integrating ESG factors.
Fundamentally, it begins at how you define these particular environments (Environmental, Social, Governance). In the US markets, we have some leaders, some extreme leaders. But then you’ll find a long tail of people, who probably in their lifetimes would never embrace the concepts or philosophically rethink how they make decisions either as a consumer, a voter, or as an investor.
As an investor, you must not fail to ask one question, which is: “How are you, my financial advisor or investment manager, integrating ESG in my portfolio and the money that you are stewarding and managing for me?” I think we need to join those dots between polite conversation, high-level rhetoric, intellectual stimulation and actually getting our bums off seats, and asking very frank, very easy questions that help drive the market and drive the demand. If investors are the major influencers of companies, how do we as investors talk to those companies?