Investors Seek to Align Investments with Values

According to the Irish Times, ethical investment comes down to ‘doing well by doing good,’ and allocating capital to areas that will return a healthy profit and make some kind of positive social impact.

According to Sam Instone, the chief executive of AES International, “The UAE has a very forward-thinking vision.” In the UAE, unlike other parts of the world, collectivism is important. Here corporate social responsibility strongly draws on cultural traditions of philanthropy, business ethics, and community embeddedness, all of which are deeply rooted in the teachings of Islam. These teachings emphasise generosity and community involvement and stretch beyond the private realm to encompass business activities.

According to a 2018 report by International Adviser, it was stated that 60% of Chinese and 53% of UAE investors have exposure to ethical funds, the highest of the 10 countries surveyed. Investors select investment vehicles for their ESG credentials and avoid investing in firms with a focus on the production of armaments, unsustainable energy production, and a poor record of corporate governance.

Diversity is the key to investment work in the long term.  Sustainability reporting is successful if the practice of measuring, disclosing, and being accountable to internal and external stakeholders for organisational performance towards the goal of sustainable development is measured at regular intervals which is currently not the case in some parts of the region and can be easily worked on.

Diversified investments can also inspire the uninterested and uninspired to change their method of investment to create a cycle of change. However, the Ethics of ESG means that a practical plan must be put in place. To reflect commitment to the net-zero commitment it must be underpinned by a science-based target to reduce emissions between 30%- 50% in absolute terms to create a change. The commitment to net-zero includes two-way communication with clients to have them invest in reducing their emissions as well as reducing those from their distributors too.

Reuters states, A CRB report found that out of seven sectors surveyed, including oil and gas, real estate and hospitality, the financial sector held the highest percentage of corporate responsibility awareness at 68%.

Building smart “net zero communities” is the way forward. For this total member involvement which includes an individual, collective and regional commitment is essential. Hence building a culture of sustainable community can develop the ethics of ESG further.