Money Basics with Martin Hesse: How you can contribute to a better world

HOW YOU CAN CONTRIBUTE TO MAKING THE WORLD A BETTER PLACE

MONEY BASICS

with MARTIN HESSE

THIS article was originally just going to be about your finances, and about how, by investing in ESG-focused investments, you can help the world to be a better place. But it dawned on me that it’s not just about how we invest our money; it’s about how we live our daily lives. There are innumerable ways, as consumers of products and in how we interact with society and the environment, in which we can a) immediately make a difference at ground level and b) move the needle in influencing companies to change for the better. After all, it’s ultimately all about a better quality of life, not only for ourselves but, importantly for our children and grandchildren, who will bear the brunt of our collective harmful actions.

DAILY LIFE

I live in what I regard as the most beautiful city in the world – Cape Town. It saddens me that there are many Capetonians who don’t feel the same way as I do, considering their disregard for the environment and the resultant staggering amount of litter in and around the city.

The first thing we can do to make the world a better place is by not littering and by teaching others not to litter also. And ditch the expectation that others will clean up after us.

There are so many other things: we can walk to the shops instead of using the car, bicycle to work, pick up others’ litter when walking along the beach, recycle glass, cardboard, aluminium cans and plastics...

PRODUCT CHOICES

It is through our choices of the products we buy and consume that, collectively, we can probably make the biggest difference to the state of the world. While we need to be careful of “greenwashing” – where companies pay lip service to green issues without any fundamental change in company culture – we can choose environment-friendly products over non-friendly ones.

We can reduce our use of single-use plastics. We can opt for brands from companies that treat their employees well and that give back to society. We can boycott companies that behave badly or that reward their executives with obscenely high bonuses. We can choose to buy from the small, hard-working local producer rather than the global conglomerate. Don’t underestimate your power as a consumer!

INVESTMENTS

Your investments can be divided into retirement-fund investments and discretionary investments. In both, you have choices and options. ● Retirement funds. If you belong to an employer-linked pension or provident fund, you may have choices about the underlying investments. If you don’t, as a member of the fund you can approach the trustees or principal officer to find out the fund’s policy towards ESG investing. In a retirement annuity fund (a personal retirement fund not linked to an employer) you are likely to be able to choose specific underlying funds on the investment platform. ● Discretionary investments. While a handful of South African asset managers have been active in stewardship for a number of years and have incorporated ESG criteria into their investment selection processes, only two so far, Old Mutual and Efficient Select, have taken the step of offering an ESG fund that invests in the JSE: the Old Mutual ESG Equity Fund and the Select BCI ESG Equity Fund. However, investing globally and offshore, you have a wider choice of ESG funds.

Global funds denominated in rands offered by local asset managers include: the Old Mutual MSCI World ESG Index Feeder Fund, the Old Mutual MSCI Emerging Markets ESG Index Feeder Fund, the Satrix MSCI World ESG ETF, the Satrix MSCI Emerging Markets ESG ETF, and the Sygnia Itrix S&P Global 1200 ESF ETF.

The London-based asset manager Schroders offers three funds registered to be marketed in South Africa and denominated in US dollars: Schroder ISF QEP Global ESG Fund, Schroder ISF Global Sustainable Growth Fund, and Schroder ISF Global Energy Transition Fund. No doubt this list will grow in the near future. NOTE: This should not be construed as financial advice – consult a qualified financial adviser before making an investment decision.