Environmental Social and Governance

'Good’ companies make good investments

Good companies often make good investments. Bad tend to be bad investments.

This is:

  • Environmental, Social, and Governance (ESG)
  • Socially responsible investing (SRI), or social investment
  • Impact investing
  • Sustainable investing

5 Very GOOD investment reasons:

  • Revenue (top line) – new markets, expand existing. Consumer preference. A strong ESG proposition helps companies open new markets and expand in existing ones.
  • Costs – substantially reduce by lessening rising operating costs such as energy, raw materials, water and waste. Lower costs mean better profit margins. Less risk.
  • Reduced regulatory and legal interventions and associated costs. Regulatory action varies by industry sector. Banks, Automotive, Aerospace, Defence, Technology, Transport, Energy and Materials have 50% to 60% of their profit at risk from potential Government/regulatory sanctions.
  • Employee productivity – attract and retain quality, motivated and purposeful people. Bad corporate behaviour can lead to strikes, slowdowns and other employee-led disruptions. Job satisfaction equals better everything. Today people want to work for a company that has a positive impact on the world.
  • Better Investment and capital allocation. Better ESG also gives access to cheaper capital or debt. This can be as much as 2%. Capital allocation decisions focus more on the long-term cost versus benefit leading to longer term and more sustainable returns.

TEAM Asset Management is a trading name of Theta Enhanced Asset Management Limited which is regulated by the Jersey Financial Services Commission.