South African investors have mixed feelings about ESG

Most South African investors don’t consider environmental, social, and governance (ESG) issues in their investment decisions.

This was one of the findings in Daily Investor’s 2023 South African Investor Report, based on responses from 1,443 retail and institutional investors.

The survey was conducted in July 2023, and most respondents were high-income earners who actively invested.

There is a lot of hype around ESG investing, especially with the green revolution gaining momentum.

ESG refers to asset managers or retail investors applying a set of standards to make socially conscious investing decisions.

• Environmental concerns, like a company’s green energy credentials, what it does for the environment, and how it tackles climate change, are particularly popular.

• Social issues include how a company treats employees and deals with suppliers and customers.

• Governance relates to shareholder rights, executive pay, audits, and internal controls.

Although ESG is a growing trend, with many investors putting their money behind their values, they are still in the minority in South Africa.

Only 45% of South African retail investors said they consider ESG issues when deciding which companies to invest in.

However, it is higher than last year’s 41%, showing growing awareness regarding this investment trend.

52% of institutional investors said they consider ESG issues in their decisions, which is also higher than last year.