GETTING STARTED
Common QuestionS Relating To ESG and Responsible Investment
This section is the place to start to become familiar with the key concepts and current discussions relating to ESG topics and ESG investment strategies.
We introduce the the key Environmental, Social and Governance (ESG) issues, and unravel some of the terminology.
The relationship between ESG, fiduciary duty and investment performance is also discussed.
Common Questions Content Finder
Fiduciary Duty and Investment Performance
What is Fiduciary Duty?
Fiduciary duty (or equivalent obligations) exist to ensure that those who manage other people’s money act in the interests of beneficiaries and do not serve
Is ESG-integration aligned with Fiduciary Duty?
Yes. Regulation 28 makes it clear that ESG integration as part of a Responsible Investment strategy is not only consistent with fiduciary duty, but is
Is my pension fund legally obligated to consider ESG risk?
If you are a South African pension fund, the answer is Yes. Regulation 28 of the South African Pension Funds Act No. 24 of 1956,
Where is the discussion on ESG and fiduciary duty internationally?
Global consensus has emerged that actively considering ESG is in line with fiduciary responsibility. According to the UNEPFI report Fiduciary Duty in the 21st Century
How well established is the link between ESG and financial performance?
There is now convincing evidence that ESG factors can – and do – affect investment risks and returns across a range of asset classes. There
Will responsible investing lead to lower returns?
No, responsible investing does not mean lower returns. RI is not driven by charity, morality or ideology, it is driven by the business case of
Terminology and Jargon. What are the definitions?
I find the terminology and jargon confusing. What are the definitions?
You are not alone. It is useful to understand that different terms have evolved in different contexts to help explain the same set of practices.
What are examples of E, S and G factors that influence Pension Investments
Although environmental, social and governance issues are often grouped under three separate headings, in reality they are closely connected and interdependent. Good governance provides the
Is responsible investment the same as developmental investment
No. RI is still sometimes confused with developmental investment in national priorities such as infrastructure, social housing and job creation. Responsible investment strategies might
What is the difference between PRI and CRISA?
Both the UN-supported Principles for Responsible Investment (PRI) and the Code for Responsible Investment in South Africa (CRISA) offer a set of principles according to
Which ESG Strategies are Feasible For My Fund?
I find the process overwhelming, what are the first steps to help my fund with ESG integration?
RI and ESG integration does not need to be complicated. Trustees also do not need to become experts on ESG matters or ESG investment strategies.
How does a South African pension fund ensure optimal ESG impact through strategic asset allocation?
With so many ESG products and options available from service providers, where do I start? Investment instruments focused on impact investing offer exciting prospects from
Most of my portfolio is in the SA listed markets which has a small investable universe where negative screening is not really an option. Does this mean I cannot invest responsibly?
No. Exposure to a small listed universe does not prevent responsible investment. Negative screening and exclusion are only a sub-set of the available tools for
Is there a difference in RI implementation between a DB and DC scheme?
Is there a difference in RI implementation between a DB and DC scheme? This Guide does not make a distinction between defined benefit (DB) and
My fund is a smaller/retail/umbrella fund with a passive mandate how can I integrate ESG
South Africa has a highly fragmented pension fund sector and more than 3,000 funds have an AUM of less than R1billion (approx. USD 80m). This
How can my fund apply engagement strategies in passive mandates?
Asset owners should have the same fundamental perspective on engagement regardless of whether an active or passive strategy is in question. Even though passive investments
What is the cost of implementing ESG?
The costs of implementing ESG depend on the ESG-integration strategies chosen by the fund, but generally may relate to costs associated with bringing in ESG
What are the leading pension funds doing?
The conversation has in the past few years moved from the activity of ESG integration to a focus on the actual real-world results of that