How Investec's new ESG guidebook can transform your investment strategy

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Tailored for investors and trustees within charitable institutions and the wider philanthropic community, this guide aims to enhance their understanding of responsible investing strategies.

The ESG and responsible investing Guidebook developed by Boipelo Rabothata, ESG specialist and co-fund manager of the Investec Global Sustainable Equity Fund and Maxine Gray, business strategist at Investec Wealth & Investment International, is a free-to-download educational resource that examines five simplified key steps that can be undertaken when looking to understand what responsible investment is and what questions should be posed to enable long-term success and sustainability.

“This guidebook not only allows trustees of charitable institutions to fulfil their fiduciary responsibly by understanding ESG integration and stewardship, but enables them to ask the right questions to the fund managers to whom they are allocating money,” says Gray.

“ESG is a rapidly evolving area and embarking on the journey can be daunting. Today, investors and trustees are increasingly being expected to understand the impact and importance of responsible investment strategies and this guidebook provides a useful reference point.”

Supporting responsible investment

Responsible investing is not a one-size-fits-all, exclusionary process, but rather a framework that overlays risk analysis, with an additional focus on quantifying stakeholder impact. The ESG and responsible investing guidebook was therefore developed to provide digestible and simplified insights into how investors, and trustees can be equipped on their responsible investing journeys.

Charitable institutions and the philanthropic sector at large have an opportunity to leverage their investment strategies to also maximise their contributions to society and the environment, all while ensuring financial sustainability.

"As the lead author of the guidebook, Rabothata used a model that combines ESG considerations with careful risk management. This model not only focuses on the immediate impact that charitable and philanthropic institutions aim to achieve but also encourages them to consider the indirect benefits of how their capital is invested," explains Barry Shamley, fund manager at Investec Investment Management.

“We know that the role of business has shifted to a more considered stakeholder model and therefore this guidebook aims to provide practical steps for responsible investing, as a primary consideration for decision makers – trustees, investors and fund managers alike.

"However, beyond ESG and responsible investing, it also provides an overview of the impact of ESG risks on the long-term value of capital, while offering strategies for mitigating these risks,” Shamley explains.

“Responsible investing should be tailored to each organisation’s unique circumstances, while integrating ESG risks and opportunities sit at its core,” adds Gray. “Our guidebook is aimed at simplifying the information on ESG and assisting users to assess and navigate the associated risks, and opportunities, to create a responsible investment policy – all through the lens of an investor, trustee, and decision-maker.”

Sustainable investing cornerstone

“Investors play a critical role in responsible investing. However, there are currently different ideas of what “responsible investing” means. Terminology is used interchangeably in the market in which stakeholders have a disparate level of core knowledge on this space.

"That, together with politicisation and other macro-economic challenges faced across the globe, have in part contributed to the anti-ESG movements seen today. The basis of progress lies in finding a common definition and shared understanding of the fundamentals in order to move forward meaningfully.

“We need to inspire fast action towards preserving our planet, managing resources wisely, and improving living standards – responsible investing is a small step that we can take as a start,” adds Gray.

“That’s why we are dedicated to supporting the market with this guidebook, ensuring that when funds are invested in companies or allocated to fund managers, they can prioritise both their impact on the world and their ability to generate long-term sustainable profitability.

“Trustees of foundations can ‘give back twice’, once through their investment strategies and then through their disbursements and the ESG and responsible investing Guidebook gives institutions a simplified way to undertake this.

"Certainly, given Investec’s clear focus on sustainability, investment expertise and its holistic offerings for charitable institutions, it is well positioned to support this journey for investors and the philanthropic sector,” Shamley concludes.