Invest
ESG-compliance a sign of solid management
When looking for good companies to invest in, ESG-observance is a key sign that “management has its act together”, a major investment bank has said.
ESG-compliance a sign of solid management
When looking for good companies to invest in, ESG-observance is a key sign that “management has its act together”, a major investment bank has said.
UBS head of global emerging markets and Asia-Pacific equities Geoffrey Wong told Nest Egg that observance of environmental, social and governance (ESG) factors in companies’ investment decisions indicates that management has “its act together”.
“It can look after business, observe the environmental and labour laws and so on,” he said.
Mr Wong explained that UBS has a 32-point checklist for every company it considers, with nearly half of all questions of an ESG nature. Further, the most recent additions to the checklist are of environmental and social natures.
“We had a lot of questions on governance from the beginning, because governance has always been a traditional part of good, fundamental investing,” he said.
“But more recently we've gotten more sophisticated with the environmental and social questions as well. So not only are we looking at the environmental and social practices of the company, but we added questions on about the suppliers to the company as well.”
Mr Wong said he’s often asked what the proportion of clean Chinese companies are, however argues this is an irrelevant question.
“The question is whether I can form a portfolio of let's say 20 or 30 stocks in China, which are very good quality. And the answer is definitely yes, without a doubt,” he said.
Mr Wong said this approach stands for all markets, and especially European markets where it’s practically normal business practice.
This is good news, he said, as it also helps clients make money.
“Every year I test how well the [32 question] scoring works and last year when I tested it, at the end of the year, for the prior three years, the top one-third of quality companies outperformed the bottom one-third by 14 per cent per annum the previous three years,” Mr Wong said.
“So, actually good companies do better than bad companies generally.”
Property
ANZ now expects house prices will end the year lower
With higher interest rates on the horizon, the bank is forecasting larger house price declines than previously expected. ...Read more
Property
Which capital cities are most attractive to property investors?
A new survey has suggested that investor attention is shifting away from Australia’s two largest capital cities. ...Read more
Property
Market uncertainty fails to discourage foreign property investors
While interest from foreign investors in Australian property has remained strong, HLB Mann Judd warned that tax increases could see demand shift to other markets. ...Read more
Property
Regional renters forced to spend more of their income than ever before
Renters in regional areas are spending nearly as much on rent as home owners are spending on mortgage repayments. ...Read more
Property
Aussie home buyers now need to save for over 11 years for a deposit
Since early 2020, the time needed to save for a deposit has increased by more than two years. ...Read more
Property
HSBC forecasts 2023 house price decline of up to 10%
The firm had previously predicted a modest rise for house prices next year. ...Read more
Property
Perth house prices continue climbing to a record high
While growth may have come to an end in Sydney and Melbourne, Perth house prices are still on the rise. ...Read more
Property
Stamp duty significantly slowing path to purchase for FHB
Saving for a home takes years for the typical first-time buyer. In Australia’s largest cities, as much as two years are spent simply building up the funds to pay the cost of stamp duty, according to...Read more
Wrapping up an eventful 2021
Listen now
What Omicron means for property, and are units right for first-time buyers? What is equity crowdfunding? Are industry super funds tapping into member funds to save their skins?
Listen now
Will housing affordability improve in 2022? Will buy now, pay later become the norm? Why are Aussies staying in failing super products?
Listen now
Who really benefits from crypto ETFs? How will the RBA respond to rising inflation? Could a mandate help address unpaid super?
Listen now
Property
ANZ now expects house prices will end the year lower
With higher interest rates on the horizon, the bank is forecasting larger house price declines than previously expected. ...Read more
Property
Which capital cities are most attractive to property investors?
A new survey has suggested that investor attention is shifting away from Australia’s two largest capital cities. ...Read more
Property
Market uncertainty fails to discourage foreign property investors
While interest from foreign investors in Australian property has remained strong, HLB Mann Judd warned that tax increases could see demand shift to other markets. ...Read more
Property
Regional renters forced to spend more of their income than ever before
Renters in regional areas are spending nearly as much on rent as home owners are spending on mortgage repayments. ...Read more
Property
Aussie home buyers now need to save for over 11 years for a deposit
Since early 2020, the time needed to save for a deposit has increased by more than two years. ...Read more
Property
HSBC forecasts 2023 house price decline of up to 10%
The firm had previously predicted a modest rise for house prices next year. ...Read more
Property
Perth house prices continue climbing to a record high
While growth may have come to an end in Sydney and Melbourne, Perth house prices are still on the rise. ...Read more
Property
Stamp duty significantly slowing path to purchase for FHB
Saving for a home takes years for the typical first-time buyer. In Australia’s largest cities, as much as two years are spent simply building up the funds to pay the cost of stamp duty, according to...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
