We are frequently questioned about the purpose and value of recognizing ESG (Environmental, Social and Governance) factors in an investment process and the extent to which that research can be given a monetary value.
It is indeed often difficult to explicitly quantify the precise valuation impact of a non-financial metric, but we are confident that by not only recognising the role that ESG has to play in investment analysis, but also by encouraging best practice from the companies in which we invest, total shareholder return, over time, should be enhanced. We note that one week after we wrote of our efforts to promote responsible gambling in the betting industry Swedish online sports company Global Gaming has had its license revoked for questionable practices in this very area.
The result, at the time of writing, a greater than 50% fall in that company’s share price. Here the lack of focus on ESG is quantifiable as the result is plain for all to see and we will clearly continue to focus our efforts in this area.
This publication and the views expressed in it are for information purposes only and should not be considered as an offer, investment recommendation, or solicitation to deal in any of the funds or securities mentioned and does not constitute investment research, investment recommendation or investment advice. At the time of writing SVM Asset Management Ltd may hold positions in the securities mentioned in this article.