CAPE TOWN - Socially responsible investment in SA was not significantly geared towards a responsibility for the environment, a University of Cape Town study has found.
The post-doctoral research was conducted by Stephanie Giamporcaro of the university's Environmental Policy Research Unit. She wanted to find out if the South African investment industry was an agent for environmentally responsible economic growth in the country.
She interviewed portfolio managers, financial analysts, CEOs, chief investment officers, pension fund executives and investor relations executives of 22 asset managers, pension funds and service providers.
In doing so, she focused on the approaches adopted by the socially responsible investment market which as of July last year consisted of 38 labelled products with a market value of R23,3bn.
She found that the approach most commonly adopted by 45% of the respondents was "positive screening" - investing in approved sectors of the economy such as renewable energies, clean transport and infrastructure - as opposed to "negative screening" (24%), which meant avoiding investing in particular sectors such as tobacco, alcohol and armaments.
The majority of respondents focused their responsible investments on developmental goals (58%), followed by sharia law (24%) and a broad focus on ethical, social, environmental and corporate governance (18%).
Most said their clients were only interested in the trade-off between financial return and socially responsible investments, but Giamporcaro stressed that academic studies had shown there was no trade-off required as these investments generated similar returns to others.