WealthDFM | June 2021
VALA CAPITAL
It’s all about measurement...right?
Mike Penrose, Chair of the Investment Committee for Vala Capital’s Sustainable Growth EIS makes a strong case for rethinking the way in which businesses are screened in terms of their ESG and impact credentials
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here is an old business adage that ‘you treasure what you measure’, and with sustainability and ESG measurements, there are certainly no shortages of metrics and measurements out there to choose from. Having your own proprietary set of ESG indicators has become de rigeur for many major investment firms. This is partly because being perceived as being on the right side of the sustainability debate is now an absolute necessity, but also, and definitely more importantly, because the money trickling down through the system from the big investment firms and pension funds are now conditional upon it. From the pressure coming from initiatives such as Task force on Climate-related Financial Disclosures (TCFD), to the now (in)famous letter written by Larry Fink at the beginning of the year, the ability to quantify the impact your investments have on the climate, the
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environment, and on society are now an expectation, and no longer an exception.
MEASURING SUSTAINABILITY Unfortunately, when it comes to measuring sustainability, nearly all the indices and methods of measurement out there tend to fall into one of two camps, neither of which we think really hits the mark.
Now forgive me for sounding a little obtuse, but surely ‘not actively being bad’ should not be an aspirational goal for most companies
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