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The end of ESG Investing as we know it.

29 April 2020

Needless to say that the events of the last several months have caused large scale disruptions to lives of the global population. Perhaps one of the only beneficiaries from the enforcement of global lockdowns across the world is our environment.

Our air quality has improved due to the fewer cars on the road, our skies are free from the condensation trails left by aircrafts, while in Italy, the Venice canals have never looked clearer, as motorised boats and giant cruise ships have disappeared.

All this has led us to question whether this COVID-19 induced market sell-off will have changed the outlook for environmental, social & governance (ESG) investing.

Will people, having witnessed these tangible differences to our society and the environment from small changes to behaviour, become more conscious of this when making their investment decisions in the future? And will they recognise the merits of investing ethically in market downturns such as these, as a way to protect capital by mitigating risks that become exacerbated during periods of market stress?

What we have seen over recent months is that ethically-orientated companies have been loved on the way up and equally on the way down.

The Presentation Video

As outlined in our blog summary this webinar presented by James Penny reveals some startling facts related to Environmental, Social, Governance (ESG / Ethical) investing.

Below are the key points and where appropriate time stamp indicators should you wish to jump to a specific section of the video.

ESG / Ethical Investing has become a 'new world investment order' and will / is becoming the mainstream.

ESG set to become the biggest ever disruptor in te investment world - ESG has moved on massively since the early days of animal welfare type issues.

Companies are increasingly required to comply with sustainable goals set by both conventions and governments worldwide.

Covid-19 has created an inflection point and been the catalyst for reflection for companies and governments alike.

Covid has highlighted the issues of global pollution and the massive reductions that have occurred during the pandemic - the impetus to keep going is very real.

  • 6:40 Stakeholder & Shareholder relationship changing whereby stakeholders are increasingly demanding compliance to ESG standards.

  • 7:40 Governments are demanding ESG responsibility from companies that require financial support during the Covid crisis.

  • 10:00 Populism and political drivers are much in evidence now.

  • 13:00 Populism is not bad - older fund managers are now giving way to the younger fund managers who themselves are far more focused on ESG responsibility.

  • 15:00 The catalysts for change - stattistics illustrate the desire for investors to use ESG funds.

  • 18:00 Stattistics also reveal that ESG investing can and does outperform on both the upside and downside - the TAM Ethical portfolio is far less correlated on the downside.

  • 20:00 Having and applying ESG credentials means that main stream investors are becoming more attracted to such companies.

  • 21:00 ESG is set to become supercharged with Trillions of USD set to switch from mainstream to ESG funds.

  • 24:00 TAM Ethical portfolio demonstrates superior defence for capital.

  • 25:00 TAM scrutinise each and every investment to be consistent with risk mandates.

  • 28:00 Those companies looking to transition to ESG principles are most likely to survive in the current market.

  • 29:00 Increased due diligence and research are required for ESG companies - TAM only access institutional share classes.

Learn more about ESG Investing

Learn more about TAM Portfolio Management

Learn more about TAM ESG Portfolios

Take a deep dive into what Discretionary Fund Management is all about and review the presentation of a portfolio statement