What we are liking about the new radio insert Not The Daily News by Michael Avery and 10X Investments is that the discussion of global issues focuses the lens on the opportunities as well as the problems.
In the second edition of the show (on Classic Business on Thursday September 15), 10X’s Chief Investment Officer, Anton Eser, talked to Michael Avery about ESG investing.
After giving some background on what ESG investing is and how it all began, Eser noted the importance of separating the cynical view (that it is just a marketing tool) from the real changes – from emissions disclosure to pay within companies and so on – that are being achieved thanks to investor pressure on companies.
He pointed out that ESG investing has led to a lot of change that goes beyond marketing and ‘greenwashing’, such as companies committing to net zero in a certain time-frame and separating the positions of chairman and CEO.
ESG investing may have started with box-ticking for many but, Eser says, what is more important is where we are going now, for example truly measuring and understanding impact.
“Over the next couple of decades what we will be thinking about from an investment perspective is ‘How do we create a sustainable company?’ he says.
The impact that companies have, both on the environment and on social factors etc, is going to be the determinant of successful companies in the future.”Anton Eser, 10X Investments
Chief Investments Officer
“There is a cynical view, but there is also a real, almost financial, view that you can’t invest in a company that is not sustainable … [and] … not integrating these factors into the way you run your company is just not sustainable,” Eser said.
The conversation then touched on the huge opportunity for South Africa and the country’s potential to be the global poster-child of the energy transition.
South Africa flirting with the idea of being a global poster-child for something brings to mind a recent rugby match (but not because South Africa is a leader in anything to do with power generation). We were not the only ones watching the Springboks downing Argentina in this nail-biter in Buenos Aires on the tiny screens of our phones as SA suffered yet more rolling blackouts.
It certainly feels like we are at the frontier of the global energy crisis but not in an exciting way. In Not The Daily News, Eser notes that the friction between the need to turn the lights on and concerns about bringing emissions down, that we feel so keenly in SA, is very real in other emerging markets too.
Consumers in developed markets are not escaping this friction either, as evidenced by everything from California’s rolling blackouts to crazy British energy prices. As Eser says, solving this problem is a huge opportunity. “If we can solve it in South Africa we can solve it in a lot of places”.
Bearing in mind that financing the energy transition is the massive investment opportunity of the near future we can see why, according to Eser, all eyes are on South Africa to see how we solve this conundrum.
A little birdie told us that this week (Thursday 22) the discussion will be about interest rates and the markets. With rates decisions expected from so many Central Banks, including the Fed and the SARB, this will definitely be interesting! Not The Daily News on Classic Business on Fine Music Radio (101.3 FM) on Thursdays from 6pm.