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Written by: George Prior
As global temperatures hit a record high, every investor now has a responsibility to consider environmental, social and governance (ESG) investments, says the CEO of one of the world’s largest independent financial advisory, asset management and fintech organizations.
The comments from Nigel Green of deVere Group come as it is revealed that Monday was the world’s hottest day on record, exceeding an average of 17 degrees Celsius (62.6 degrees Fahrenheit) for the first time, according to official measurements taken on Tuesday by US meteorologists.
“This is not a milestone we should be celebrating, it’s a death sentence for people and ecosystems,” said Friederike Otto, a senior lecturer at the Grantham Institute for Climate Change and the Environment.
The deVere CEO says: “The new record high shines a spotlight on the extreme temperatures engulfing the northern hemisphere this summer, and underscores the lack of global progress on tackling climate change – which is the biggest critical issue of our time.
“Monday, 3 July 2023, the hottest day ever recorded globally, must act as a wake-up call that more must urgently be done to battle the worst effect of human-driven environmental issues.
“As such, I believe that every investor now has a responsibility to consider ESG investments.”
But the enormously positive environmental and social impact you can have with ESG investments is not the only reason why you should consider them as part of your portfolio.
“Numerous studies have demonstrated that companies with strong ESG practices tend to outperform their peers over the long term.
“By incorporating ESG investments, investors have the opportunity to participate in the growth of companies that are well-positioned to navigate risks, capitalise on emerging opportunities, and drive sustainable innovation,” notes Nigel Green.
ESG factors provide valuable insights into a company's resilience and risk management practices.
He continues: “By considering environmental risks, such as climate change and resource scarcity, social risks related to labor practices and community engagement, and governance risks such as board diversity and transparency, you can better assess the long-term viability of investments and reduce exposure to potential risks.”
The deVere CEO goes on to add: “The global regulatory landscape is evolving. Investors who proactively integrate ESG investments into their portfolios can navigate regulatory changes more effectively and position themselves for future market shifts.
“Plus, as ESG considerations become mainstream, investments in companies with strong ESG profiles are likely to attract more attention from institutional and individual investors.
“All of the reasons and all the evidence suggest that ESG-focused investors can achieve both profitability and positive impact.”
deVere Group practices what it preaches. In 2021, it became one of 18 founding signatories of the UN-backed Net Zero initiative, the international alliance of finance powerhouses that will help accelerate the transition to a net-zero financial system.
As a global organisation, it recognises the transformative potential of ESG investments and is committed to helping investors integrate these strategies into their portfolios.
With a team of experienced professionals and a comprehensive suite of ESG-focused investment solutions, deVere provides clients with tailored advice and cutting-edge research to optimise their financial goals while aligning their investments with their values.
“The hottest day ever recorded globally tells investors now is the time to consider putting your money to work for both profits and positive change. If not now, when?” concludes the deVere Group CEO.
Related: Achieving Climate Targets: Here’s Why Failure Leads to Lessons & Changes with Pooja Khosla