Q: JONATHAN DOH: My question has to do with the role of social enterprise or social entrepreneurship in stimulating more ESG focus on the part of the Economic community overall, but also individual businesses with which the social enterprises may engage. In the US we have something called ‘Benefit Corporations’ now ‘BCorps’, which started as a real fringe initiative but is something that’s really taking off. Recently we’ve had some conventional companies like Unilever, Danone, Campbell acquiring these Benefit Corporations, essentially which are companies that indicate upfront that either they will balance or even give preference to ESG factors in relationship to conventional performance measures. What do you think is the role of social enterprise generally, and these BCoprs, these new corporate forms as being another stimulus or agent for increased ESG focus on the part of more conventional businesses?
A: GRAHAM SINCLAIR: In terms of impact investment, it’s a huge theme that’s got a lot of tail wind in Europe and North America. We consider sustainable investment as integrating ESG factors proactively into your investment process. Impact investment is a subset or sub-theme of that, where your algorithm of how much E, how much S, how much G versus how much financial return you are willing perhaps to give up some of that financial return to explicitly proactively maximize environmental social return. I want to be very clear: my position on sustainable investment is there is no trade off. If you are proactively integrating ESG, you can generate out-performance. Impact investment is when the investor explicitly goes into that, is looking for positive environmental, social return and is happy to take a benchmark or commercial rates or some discount to that. So there is that kind of impact investment and there’s a huge space that’s growing and there’s many drivers for that.
A second point I’d make is that we’ve got world class pension fund ESG regulation in South Africa. We have the best language in our pension fund investment regulation that’s partly because of some people on this panel two or three years ago. So, the regulation is there – it’s what happens after that.