Investors make an impact
TESG strategies a must for financial institutions
in their readiness for the transition to sustainability, at which point organisational agility to respond to new laws, requirements and customer expectations is going to be key. In a recent survey by Marsh, 80% of respondents in the financial services sector ranked climate change and ESG as either an important, or the most important, issue for their operations. However, 42% of respondents said they have an ineffective process, or no process at all, for identifying, responding to and implementing changes based on climate threats and ESGrelated factors. The survey also found 80% of financial companies had not yet carried out a comprehensive stress test on
financial impacts from climate threats across current and future operations. Organisations adopting a more proactive and methodical approach to understanding the impact ESG factors and climate change will have on their most valuable assets will be able to embed greater levels of resilience into their operations, says Fatouros.
health, safety, and wellbeing; the impact it has on the local community and whether those effects are beneficial or adverse; the labour standards of its suppliers; and the need to embed diversity and inclusion policies, social equality and customer privacy. Governance criteria would focus on board structure,board diversity, audit quality and transparency, and issues surrounding remuneration, such as executive pay. Fatouros points out that financial institutions differ vastly
months, says Lewenson. Talk of a second
Seismic has followed Dutch petroleum company Shell s most recent efforts. This raises the question of the role of developed markets in helping to steer emerging markets such as SA in the right direction to support a just transition, in addition to the role of developing markets to plan the pursuit of a less carbon-
targets.
retail investors capital towards sustainable investments. As asset managers, we have a responsibility to understand how climate action affects the companies we invest in, says Lewenson. OMIG, which stewards about R350bn in client capital, is among the many savings and investment industry stakeholders aligned with the global climate goal of reducing carbon emissions to limit the global average annual temperature increase to less than 1.5°C between now and 2100. Recently it announced it has joined the Net Zero Asset Managers Alliance, a group of about 220 global asset managers with $57-trillion of assets under management that have pledged to align their businesses with global efforts to limit global warming. In line with our commitment to the Net Zero Asset Managers Initiative, OMIG will be working on decarbonisation investment targets and will be disclosing these publicly in the next 12
from developed market countries to invest towards a just transition to netzero carbon emissions. The funding is an opportunity to reset, not only from a governance perspective but also to imagine a new reindustrialisation pathway for the South African economy, says Lewenson. He points out, however, that asset managers are not responsible for enforcing or monitoring climate change
SA WILL HAVE TO CLEAR SOME TOUGH SOCIOECONOMIC HURDLES TO ACHIEVE A JUST TRANSITION AWAY FROM FOSSIL FUELS
Marcel Goncalves there are three key elements.
Robert Lewenson stewardship.