This time the topic is SUPER’s desired responsible investment.
As always when dealing with a new topic, this one is just a scratch on the surface of a broad and complex topic (but does not let it depress). The section reviews the basic concepts of responsible investing, including ESG issues.
ESG = environmental, social & governance issues
Oh, what miraculous ESG issues? ESG stands for the environment (environmental responsibility), social (social responsibility), and governance (good governance). ESG issues help us assess the responsibility of investment targets.
Corporate environmental responsibility assesses the impact of business operations on the environment. These may even include energy efficiency, CO2 emissions, various environmental programs, and standards and certificates for responsible production. In its brevity; whether the company is working against the planet, for it, or something in between.
Corporate social responsibility, on the other hand, describes issues related to human rights and working conditions. What kind of personnel policy does the company follow and what kind of working conditions do the employees have? Does the company pay attention to its local community in its operations and does it condemn, for example, child labor?
Good governance refers to business ethics. For example, that the company’s board of directors is independent and anti-corruption, and that the company pays all the taxes it is due to pay. Good governance therefore basically means that the types in the company’s management are good and do their job properly.
ESG issues are used to find investment targets with the best possible risk-return ratio. So, of course, responsible investing is not (of course) about charity, but about an investment strategy that seeks a better return on your portfolio. And who wouldn’t want that now?