The GIB corporation in Malaysia and Singapore strongly advocate for companies to implement the ESG strategy in their global investing in order to yield high business returns. Many may ask themselves, what is ESG? Well, in the past, companies and business owners were only focused on establishing their businesses solely for the purpose of gaining a profit. However, in the early 90s, a new concept of the three P’s in business was introduced. The three P’s–People, Planet and Profits–were introduced and urged businesses to practise this framework since they were all important for a business to succeed.
This concept is what would later eventually become ESG–Environmental, Social and Governance. The reason for this concept was to the forefront how businesses impact the environment in ways such as pollution and deforestation. Also, labour concerns such as how workers are treated in terms of giving good working conditions and equal opportunities also gained greater prominence.
The Governance aspect examines how a company is run–having accountability mechanisms such as board structures, tax strategy and whether corruption or bribery is practised. ESG investing suggests that companies are more likely to succeed if they create value for shareholders as well as their employees, customers, the environment and the society at large. We believe that our approach to ESG does not only benefit the company, but society and the environment, therefore, producing a positive impact on the companies we choose to invest in.
GET’EM IN BUSINESS (GIB) INVESTMENT STRATEGY AND THE IMPORTANCE OF ESG INVESTING
The GIB corporation strongly believes in ESG investing, and that is why we are able to help small businesses in the community. Before investing in a company, business or organisation, our corporation examines whether the business or company we are investing in aligns with our business values which is typically what ESG entails. It is important for companies to have a good ESG profile to support the growth of environmental and social benefits. We ensure that the companies we plan on investing in meeting all three criteria.
After the global pandemic outbreak, ESG investing has been put to the forefront of the business world, urging companies to make a positive change.
Another way GIB Malaysia and Singapore incorporates ESG investing into our corporation and business decisions is through sustainable investing. ESG can contribute to healthy competition between companies and good business returns. How does it do this? With ESG investing being implemented in many companies, investors fear the high cost of implementation will outweigh the benefits and eat into returns and profits.
However, that is not the case. Creating a good ESG profile for your organisation is beneficial because it can help the company gain a competitive advantage. According to this article, a good example of this is when the British retailer Marks and Spencer implemented the ESG strategy in their organisation, introducing practices such as reducing waste and being of help to the communities, it enabled them to save a large amount of money.
We also believe that ESG helps and aids in new markets. The research we have done indicates that companies that choose to implement ESG investment strategies tend to do better in new and upcoming markets as compared to developed and established markets.
GIB in Singapore and Malaysia believes that if companies consider applying ESG strategies in their global investments, it increases the value in their investments instead of adding to the risks. GIB ESG researcher Liza Chan says, “One of the main reasons our corporation is successful is because we are able to care for our employees and the society. This is beneficial because caring for your employees by treating them fairly and ensuring they have good working conditions motivates them to create new ideas that benefit the company leading to outperformance as compared to a company that only focuses on making profits.”
This is because when taking ESG into consideration, it is not just analysing what the investment strategy has done to improve company profits but also checks how the company is run, its behaviour and conduct towards the society, as well as its environmental impact. “Using ESG strategy is a more modern approach that is aligned with today’s world, as compared to looking and repeating previous investment strategies just because they were successful. We strongly recommend it to anyone interested in today’s global investment trends,” said GIB’s Liza Chan.
6 INVESTING TRENDS IN ESG FOR 2021
The pandemic made many businesses, industries and investors aware of the large gaps and inequities in society. This has encouraged companies and investors to implement and focus on ESG strategies. 2021 has definitely introduced many new technologies, new business models and investment trends, putting ESG at the forefront. Here are some of the ESG investment trends that GIB thinks will impact global investments in the business world for 2021.
COVID -19
The global pandemic disease outbreak has definitely brought light to many investors and organisations on the importance of ESG investing. The gap created by the pandemic shows the many weaknesses and flaws of the economy and society, motivating businesses to make a change. GIB believes that 2021 will encourage the greater evolution and adoption of ESG investment strategies further.
SOCIAL CRITERIA
The pandemic definitely highlighted the weaknesses in society and the abandonment of social responsibilities. This is why we, as GIB focus on building small businesses in the community. We believe that the social aspects in ESG will be brought to the forefront in 2021 in a way that forces large organisations to pay greater attention to their social responsibilities. With the damage Covid-19 has done, many investors may only want to associate with corporations that do not put humane needs on the back burner. Many have lost their jobs due to the global disease outbreak and we expect that companies that maintained their employees on the payroll will definitely experience outperformance due to the motivation and gratitude from their employees
GREATER TRANSPARENCY OF ESG REPORTING
Companies that have already begun using the ESG strategies by accessing emerging markets and contributing to the evolution of their societies have increased. The investing public will demand greater transparency of a company or business’s ESG strategies in light of the pandemic’s devastating effects on communities. The global investing community will look for concrete data on ESG practices and outcomes in their decision-making instead of accepting surface-level, window-dressing PR statements.
“2021 will be the year of global investments driving real-world change. People want to make an impact with their money, and see ESG as the way to do it. The global investing community will demand greater transparency on this through accessing concrete data,” said GIB’s Liza Chan.
USE OF NEW TECHNOLOGIES
The crisis created by Covid-19 paved the way for new technologies to be formed. Both our GIB corporations in Malaysia and Singapore also took the initiative to come up with new technologies and digital platforms that can help the small businesses in the community become digitally accessible and operate easily. Our platform has also been designed in a way that it creates new investment opportunities specifically designed according to our consumer’s needs. We believe that in 2021 new technologies will definitely be on the rise to aid global investors in making the right business choices. With new technologies, new concepts and mindsets will be formed and we are certain that this will create a positive impact not only in the business world but overall.
GROWTH OF MARKETS
The GIB has been able to extend a helping hand to many small businesses both in Singapore and Malaysia and this has enabled new markets to grow. By creating a platform with a social impact in mind, we grew the number of investors who have contributed to the growth of new markets. Due to Covid, we have also made investment opportunities easier for everyone with just one click. This is just one form of how using an ESG strategy can grow your market. In 2021, there will definitely be growth in markets due to a large number of investments which is a good thing because the large gap that has been created will eventually close.
EMERGENCE OF BRAND NEW AREAS OF INVESTING
The global pandemic highlighted many serious social issues such as environmental damage and unequal access to healthcare. In 2021, many global investors will be on the lookout to explore new opportunities and areas to invest to address these problems using an ESG investing strategy. GIB foresees that there will be a motivation to reduce waste and preserve the ecosystem. There will be an increased demand for investments in renewable energy, green transportation and construction, as well as biodiversity and climate change.
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