Understanding the

basics of sustainability
and investment
What does ESG stand for?
AE
 nvironmental: climate change, natural resource stewardship, pollution,
waste and the circular economy.
AS
 ocial: human rights, indigenous people’s rights, child and slave labour,
bribery and corruption, inclusion and diversity, health and safety, ethics,
conduct and culture.
AG
 overnance: board composition, succession planning, executive
remuneration, minority shareholder rights and protections, and investor
stewardship.
Please note, the items listed above for each factor are not exhaustive. They are
examples of each factor that are included solely for illustrative purposes.

What is active ownership?

Using the rights of influence as financial stakeholders to actively engage
companies or assets and other stakeholders to further the long-term
interests of end investors. This consists of objective-driven dialogue
seeking positive and sustainable change in the purpose, governance,
strategy operations and in the impact on the environment and society.

What is stewardship?
The role in which investment managers use the rights – if not the
obligation – of financial stakeholders to engage with companies
or assets to pursue the objective of sustainable wealth creation for
investors.

The motivations for stewardship

A Top-down pressure: global principles; regulations and codes
A Bottom-up pressure: risk and return evidence; sustainability and positive
societal impact; and client/beneficiary investment beliefs

Academy
Why integrate ESG and stewardship?
A Reputation
A Risk
A Return
A Wider impact
It provides the industry’s social licence to operate

ESG: more than a feel-good factor?

Research shows:
A Sound ESG standards lower the cost of capital
A Solid ESG practices result in better operational performance
A Stock price performance, credit spreads and real estate is positively
influenced by good ESG and CSR practices

What is advocacy?
Actively seeking to influence change in public policy in the interests
of investors and the wider society by engaging with policymakers,
regulators and industry bodies on a range of issues. These include:
the financial system and investment industry, corporate governance,
business purpose, climate change, inequality and inclusion.

What are the Sustainable Development

Goals (SDGs)?
A blueprint for significantly changing the world – by ending global
poverty, safeguarding the planet and aiming for prosperity for all – by
2030.
There are 17 SDGs, and within these goals there are 169 targets and 230
indicators.
Through investing and engagements, we can support the attainment of
the SDGs.

What is impact investing?

Purposefully targeting companies which can generate positive social or
environmental outcomes in addition to financial gains. Impact investors
mainly target investments that are able to provide solutions which make a
positive contribution towards the attainment of the 17 SDGs.

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