Our focus areas

Why should it matter to investors?

The negative impacts of climate change - warmer temperatures, rising sea levels, extreme weather patterns - pose systemic risks to society and the global economy. It impacts the availability of resources, the price and structure of the energy market, the vulnerability of infrastructures and the valuation of companies.

For example, extreme weather patterns, such as mega-droughts, would impact agriculture production levels, cause water shortages by drying up water reservoirs and disrupt hydroelectric supply.

Lower production levels could in turn inflate prices, impacting the profitability of businesses across supply chains and increasing the cost of living for communities.

The urgent need to transition to a low-carbon and more resilient economy require companies to adjust their business models. Those that fail to take action on climate change will face increased transition risk such as regulatory and reputational risk as governments, communities and market players shift towards a low-carbon future.

Why should it matter to investors?

Modern slavery¹ is one of the most pressing human rights issues that investors can and should take action on. The International Labour Organization has estimated that there are over 40 million victims of modern slavery². Women and girls account for 71 per cent of modern slavery victims, while one in four victims are children.

Slavery impedes development in general. It reduces productivity and innovation, and encourages bribery and corruption.

Workers coerced into jobs will seek to leave if they can. If they cannot, productivity levels are likely to drop. They also have no reason to innovate knowing that they will not enjoy the fruits of such innovation. Furthermore, companies who use slavery often disincentivise innovation fearing their exploitative practices will become harder if worker’s skill levels increase. Slavers on the other hand, would bribe and corrupt officials to protect the slavery system.

However, investors, regulators and businesses have an obligation to address modern slavery risks as a key aspect of their social responsibility too. Modern slavery and exploitation of labour is a pervasive part of global supply chains. Investors may be connected to several thousand companies through their investment portfolios, and those companies in turn may be connected to many more in supply chains.

Why should it matter to investors?

Representation matters in business and diversity should extend beyond just gender. Factors such as race, religion, socioeconomic background, sexuality and disability should all be of equal importance.

Different ways of thinking and different life experiences create more varied teams that can make better decisions. Moreover, greater diversity, achieved in an inclusive and equitable environment, leads to better outcomes for businesses and the community. McKinsey & Company found that diverse companies perform better especially if the organisation’s leadership is diverse.

They have found that organisations in the top quartile with gender-diverse executive teams were 21% more likely to experience above-average profitability than their industry peers, and organisations with ethnic and culturally diverse leadership are 33% more likely to outperform their peers3. 

Diversity leads businesses to consider various perspectives and develop better, more robust strategies and approaches. This is likely to lead to an increase in productivity,  translating to higher profitability and better financial performance.

Diversity also sparks innovation. Boston Consulting Group found that organisations with policies and practices supporting diversity increased innovation revenue by up to 12.9%⁴. Embracing different perspectives can help businesses to innovate and generate new ideas and solutions, driving long-term competitiveness.

Why should it matter to investors?

Biodiversity is the web of life that underpins the health of the planet and has a direct impact on our health and livelihoods⁵. More than half of  global economic output, about USD$44 trillion of economic value generation, is moderately or highly dependent on nature⁶. Biodiversity enables nature to be productive, resilient and adaptable. Just as we diversify our investment portfolios to reduce risk, nature needs diversity to be resilient and minimise disruption to the ecosystem that we rely so heavily on⁷. 

Disruptions to the ecosystem such as destruction of habitats, overexploitation of natural resources and pollution will disrupt the balance of nature, impacting food security and goods and supply chains.

It is estimated up to 70,000 plant species are harvested for traditional and modern medicines globally, and about 100 million metric tonnes of aquatic life are taken from the wild each year⁸.  When that supply stops, our livelihoods will be profoundly affected. 

In additional to that, biodiversity conservation is critical to addressing climate change. With the current pace of biodiversity loss, our fight against climate change will not succeed. Both issues are mutually dependent as nature and biodiversity cannot be considered in isolation from climate change.