Abstract
The year 2013 marked the 21st anniversary of responsible investing (RI) in South Africa. No systematic analysis of the nature of RI strategies and criteria has, however, been conducted. Content analysis of the investment mandates of 73 RI funds has revealed that the majority of asset managers employ impact investing strategies which address social issues such as infrastructure development and economic empowerment. Semi-structured interviews with eight experts in the RI field have highlighted growing interest in impact investing and screening strategies. If RI in South Africa is to reach its full potential, then a broader range of investment strategies and criteria needs to be adopted. Asset managers can capitalise on gaps in the current RI offering by creating RI-orientated property funds, dedicated green funds, and funds which employ a best-in-sector screening strategy. A clear need for focused RI research, training and education in South Africa has furthermore been identified.
Highlights
Twenty-one years have passed since the launch of the first responsible investment (RI) fund in South Africa in 1992
A breakdown of the RI strategies and criteria used by South African RI asset managers over the past 21 years is presented in TABLES 3, 4 and 5
The purpose of this article was to investigate the RI strategies and criteria used by South African fund managers over the 21 years since the launch of the first RI fund in the country in 1992
Summary
Twenty-one years have passed since the launch of the first responsible investment (RI) fund in South Africa in 1992. Investors employing a self-referential framework take a stand on what they do not want to own As such, they refrain from investing in companies producing ‘undesirable’ products or services (such as alcohol, tobacco, gambling and pornography), companies operating in ‘undesirable’ industries (such as nuclear energy and defence) and ‘undesirable’ countries (such as South Africa pre-1994). Since 2000, the CDP has challenged the world’s largest companies to disclose their greenhouse gas emissions, identify the perceived risks and opportunities that climate change present for their businesses and describe their strategic responses to these risks and opportunities. Did the number of companies with greenhouse emissions reduction targets increase in 2012, but improvements were observed in terms of disclosure, climate change governance, risk management and performance (South African business – Shifting the focus to performance, 2012)
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