• Login
NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
  • Home
  • News
    • General
    • Political
  • Economy
  • Business
    • Agribusiness
    • Aviation
    • Banking & Finance
    • Energy
    • Insurance
    • Manufacturing
    • Markets
    • Maritime
    • Real Estate
    • Tourism
    • Transport
  • Technology
    • Telecom
    • Cyber-security
    • Cryptocurrency
    • Tech-guide
    • Social Media
  • Features
    • Interviews
    • Opinions
  • Reports
    • Banking/Finance
    • Insurance
    • Budgets
    • GDP
    • Inflation
    • Central Bank
    • Sec/Gse
  • Lifestyle
    • Sports
    • Entertainment
    • Travel
    • Environment
    • Weather
  • NRTV
    • Audio
    • Video
No Result
View All Result
No Result
View All Result
NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
No Result
View All Result
Home Business Banking & Finance

Investing for Social Good: The case of ESG

4 years ago
in Banking & Finance, Features, highlights, Home, home-news, latest News, Opinions
3 min read
0 0
0
87
VIEWS
Share on FacebookShare on TwitterShare on Linkedin

One of the global conversations in the past two decades has been on climate change and the need to protect and sustain the environment.

Across different sectors and various levels of global leadership, concerns have also been raised with some solutions proffered to address this issue as well as social challenges and poor corporate governance practices. 

One of the approaches in dealing with these issues is the promotion of sustainable financing. The Bank of Ghana and the Ghana Association of Bankers have pioneered this in Ghana with the Vice President, Dr. Mahamudu Bawumia, subsequently launching Ghana’s Sustainable Banking Principles and Sector Guidance Notes for the banking industry on November 27, 2019.

The Securities and Exchange Commission (SEC) also signed an agreement in May 2021 with the International Finance Corporation (IFC) for the development of a green bonds market in Ghana.

Sustainable financing requires the need for businesses to modify their traditional models and modus operandi to incorporate ESG principles – environment, social and governance. 

Over the years, investors have focused on returns and security of investments, however there is an overarching need to add another cardinal consideration in the investment decision process – how will this investment or how will this investee company’s business activities impact the society and the environment and what corporate governance structures are being practiced?

The United Nations Principles of Responsible Investments (UNPRI) defines responsible investing as a “Strategy and practice to incorporate environmental, social and governance (ESG) factors in investment decisions and active ownership”. 

RelatedPosts

Multichoice Rebuffs Minister’s Claim On DSTV Price Cuts, Cites Market Conditions

MTN Nigeria Now the Most Capitalized Stock in Nigeria

Nigerian Stock Market Creates Largest Pool of Billion-Dollar Stocks in 2025

Responsible investing therefore encourages investors to look beyond their returns and also consider the effect of the business on the environment, how the business addresses social issues, and the application of corporate governance while generating its profits.

The ESG principles have been adopted to help guide businesses on how to be environmentally friendly, socially responsible and apply appropriate governance while doing business. 

The ‘E’ (environment) focuses on global warming and climate change implications and how to preserve the environment – preservation of forests and water bodies and the reduction in carbon emissions.

An example is investing in a small-scale mining business that mines minerals close to water bodies. The return may be good albeit short term, as the impact of the business on the environment is dire with grave medium to long term consequences. 

Beyond the felling of trees is the use of chemicals that destroy the water bodies and also endanger human health. In responsible investing, such businesses will not receive funding or before funding is granted, the small-scale business will have to review its business model and consider green mining which involves practices that are not harmful to the environment.

Other considerations that investors may consider in assessing the friendliness of a business to the environment is the use of fossil fuel (emissions), use of water (conservation and recycling), air pollution, waste disposal, etc. 

Responsible investing promotes the adoption of policies that enable businesses or institutions to incorporate measures to deal with factors that adversely impact the environment either directly or indirectly.

Some of these policies or measures include the use of efficient energy consuming electrical appliances, solar lighting, eco-friendly buildings water recycling setups, efficient use of water, treated waste materials and proper disposal of harmful waste, use of biodegradable plastics, etc. 

The ‘S’ (Social impact) focuses on business relationships and how a business relates to its employees, the society, and the people around it, including suppliers.

A socially responsible business takes good care of its employees and are sensitive to issues of gender balance, equality and diversity. The business’s relevance to its community is also considered.

Businesses that make the effort to improve the lives of people in their communities through foundations, projects and other community engagement activities are attractive to socially responsible investors. 

The ‘G’ (governance) covers the practices and policies of the business in the light of ethics, transparency, and accountability. Responsible investors pay attention to the business’ accounting policies and procedures; top-level decision-making processes such as that which avoids conflict of interests; rights and responsibilities of stakeholders to ensure transparency and accountability. 

Socially responsible investing (SRI) and impact investing are subsets of the responsible investing approach. SRI focuses on social values as a key consideration when making investment decisions.

SRI investors avoid investing in businesses whose products, services or operations are perceived to be unbeneficial to society. These typically include businesses that deal in alcohol, gambling, weapons, pornography, unhealthy food, among others. 

Impact investors seek to generate measurable social impact with their investments. These investors use their funds to directly address social and environmental issues through deliberate investment in sectors such as healthcare, education, agriculture and renewable energy.

Impact investors also consider investment opportunities which support societal development including increased employment opportunities, improved standards of living, and so on. 

Investors may not see immediate relatively higher returns as responsible issuers or businesses adopt and implement policies under ESG, however, the medium to long term benefits provide sustainable returns and benefits that goes beyond just the investor to the community and the nation.

As investors question and demand the adoption and implementation of ESG before providing financing or investing, issuers and institutions who raise capital will begin to pay attention to ESG principles.

Issuers will also become attractive as they adopt and implement ESG principles to ensure a sustainable future for all.  

Source: Kwabena Boamah, Chief Investment Officer, Stanbic Investment Management Services (SIMS)
Via: norvanreports
Tags: Bank of Ghanaenvironment social and governance.ESG principlesInternational Finance Corporation (IFC)Securities and Exchange Commission (SEC)United Nations Principles of Responsible Investments (UNPRI)
No Result
View All Result

Highlights

OPEC+ Nears Decision Point on Next Oil Output Hike

Europe’s Energy Future Hinges on Global Powers

US Companies Cut Investments in China to Record Lows, Here’s Why

How AI is Rewriting and Enhancing Water Risk Management

SheFarms Broiler Edition Kicks Off in Greater Accra

PharmAccess Ghana, Healthcare Federation of Ghana sign SafeCare License Agreement; to use Newest ISQua-Certified Version 5

Trending

Business

Multichoice Rebuffs Minister’s Claim On DSTV Price Cuts, Cites Market Conditions

August 3, 2025

Multichoice Rebuffs Minister's Claim On DSTV Price Cuts, Cites Market Conditions MultiChoice Ghana has pushed back against...

MTN Nigeria Now the Most Capitalized Stock in Nigeria

August 3, 2025

Nigerian Stock Market Creates Largest Pool of Billion-Dollar Stocks in 2025

August 3, 2025

OPEC+ Nears Decision Point on Next Oil Output Hike

August 3, 2025

Europe’s Energy Future Hinges on Global Powers

August 3, 2025

Who we are?

NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World

NorvanReports is a unique data, business, and financial portal aimed at providing accurate, impartial reporting of business news on Ghana, Africa, and around the world from a truly independent reporting and analysis point of view.

© 2020 Norvanreports – credible news platform.
L: Hse #4 3rd Okle Link, Baatsonaa – Accra-Ghana T:+233-(0)26 451 1013 E: news@norvanreports.com info@norvanreports.com
All rights reserved we display professionalism at all stages of publications

No Result
View All Result
  • Home
  • Business
    • Agribusiness
    • Aviation
    • Energy
    • Insurance
    • Manufacturing
    • Real Estate
    • Maritime
    • Tourism
    • Transport
    • Banking & Finance
    • Trade
    • Markets
  • Economy
  • Reports
  • Technology
    • Cryptocurrency
    • Cyber-security
    • Social Media
    • Tech-guide
    • Telecom
  • Features
    • Interviews
    • Opinions
  • Lifestyle
    • Entertainment
    • Sports
    • Travel
    • Environment
    • Weather
  • NRTV
    • Audio
    • Video

Welcome Back!

Login to your account below

Forgotten Password?

Create New Account!

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
NORVANREPORTS.COM | Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.