Experts have urged listed firms to implement sustainable Environmental, Social and Governance (ESG) policies to attract investments and grow their businesses.
According to the experts who spoke at a webinar organised by the Chartered Institute of Stockbrokers (CIS), in partnership with Chartered Institute for Securities and Investment (CISI), aside from offsetting the negative effects of environmental challenges, sustainability has become a major tool deployed by portfolio, asset managers and other investment advisers to recommend profitable companies for their clients.
Therefore, they suggested that quoted companies should embed sustainability in their business to position for increased investment demand and maximise the benefits of sustainability.
Chairman, Bond Forum and Capital Markets Pathway Qualifications Assessment Board, Chartered Institute for Securities and Investment (CISI) in the United Kingdom, Neil Brown, said there was a need for companies to entrench sustainability in their businesses to promote good governance and community relations.
Delivering a paper titled ‘Sustainability in Nigeria’s economy, Capital Markets and Investment Products’, Brown said companies should also collaborate with stakeholders to raise awareness, build capacity and promote action on sustainability.
He urged companies to identify new opportunitie whil embedding sustainability considerations into their business to avoid and minimise any negative impacts.
“Companies should create appropriate governance policies and audits to promote community relations.
They should also collaborate with stakeholders to raise awareness, build capacity, manage risks, develop solutions, promote finance of priority sectors, report value of investments made and support received.”
He said regulators expected companies to be transparent on their sustainability credentials as real actions can be under-reported through green washing tactics and their variants.
Brown noted that physical and transition risks would drive changing valuations for sectors and stocks while urging investment advisers to ascertain what drives the appetite of their clients in any investment opportunity.
“Some investors may be driven by part or whole of sustainability. Investment advisers must look for a measure that matches their clients’ objectives.
“They should also beware of misleading scorecards. There could be strong ESG scores because of bad impacts and weak ESG scores despite good impacts,” he said.
Chartered MCSI, CISI Assistant Director, Global Business Development, Helena Wilson said sustainability and the role that the financial services profession has to play in the route to net zero is now a crucial topic for investors and businesses globally.
She added that opportunities to enhance learning in the ESG area are becoming very essential.
