Earlier in March 2020, the World Health Organisation (WHO) published a white paper outlining a framework to help businesses and investors alike identify ESG factors for long-term resilience. Identifying issues that are not financially material today but could become so tomorrow is a capability that investors increasingly cannot do without.
As the COVID-19 pandemic continues to wreak havoc, the global market has seen a significant downturn. Traditionally, downturns tend to make people less concerned about longer-term planning and instead, more focused on the here and now. Combined with the lowering oil prices, it would seem almost inevitable that investors turn away from impact investing and greener energy sources. However, the opposite seems to be true!
According to the FT’s Moral Money, “the prospect of cheaper fossil fuels has also failed to halt the frenzied demand for solar energy companies, many of which have enjoyed Tesla-like share surges in recent weeks”. It seems that not even a market disruption on this scale can stop the growing trend of investors considering non-financial factors.
Speaking as a panellist on a webcast sponsored by Cornerstone Capital Group, Garvin Jabusch, chief investment officer for Green Alpha Investments, said “we are not modifying our strategy although we are holding a little more in cash right now to scoop up opportunities that are created by this market. We have a long-term buy and hold strategy that we are sticking with”.
As the WHO’s timely white paper explains, experts are predicting that the rise in transparency, greater stakeholder activism and increased shareholders emphasis on ESG issues will only intensify in the future. Coming generations have already started changing consumer markets and not even a global pandemic seems to break the trend.
