Amid rising global uncertainty, Prescient Investment Management (“Prescient”) reiterates its call for a sustainable approach to investment management with the release of its Responsible Investing Report for 2024. Highlighting its three-pillar approach – integrating ESG into investment, product development, and corporate culture – Prescient underscores its mission to foster both financial stability and impact.

The report addresses key themes shaping sustainable finance, from advancing ESG practices and leveraging Artificial Intelligence (AI) to shifts in regulatory landscapes.

“ESG is no longer peripheral – it’s central to sound investment management,” says Conway Williams, Head of Credit at Prescient. “Through ESG integration, we focus on prudent risk management and sustainable growth, enhancing both financial outcomes and societal impact.”

Prescient believes that it is becoming increasingly important to be able to look beyond financial risk when assessing investment opportunities. This is particularly relevant when assessing opportunities in markets like South Africa where unlisted investment opportunities – including infrastructure projects – are increasingly topical.

Importantly, the report details how Prescient uses its systematic approach to deepen ESG insights, making data central to its sustainable investment strategy.

ESG is here to stay with a bright future in modern investing

ESG branded initiatives and investing have come in for a high degree of scepticism in both developed and emerging markets. However, the evidence shows that, if taken seriously, integrating ESG into investment processes offers enduring value.

“A growing body of research underscores ESG’s value in mitigating risk and enhancing long-term financial performance. We believe that by embracing ESG factors, we can make more informed investment decisions that anticipate future risks and capitalise on emerging opportunities. ESG is not an add-on but a critical part of modern investment strategy, enabling us to navigate a rapidly-evolving world with confidence and resilience,” explains Michelle Green, Credit Analyst and Chair of the ESG Committee at Prescient Investment Management.

Green continues; “If we look to the future, the consideration and integration of progressive technologies such as various AI tools available, Natural Language Processing (NLP), and platforms such as OpenInvest continue to evolve. We are excited at what the future holds, and how we can include these to further improve our processes, and thinking on responsible investing matters”.

The Responsible Investing Report bridges the gap between investment theory and practical applications by incorporating a number of insightful case studies. These include JSE-listed equity investment opportunities such as Calgro M3, specialised investment vehicles in agriculture – including those encompassing Shari’ah principles – infrastructure investing, renewable energy and the associated impact measurement metrics for each of these case studies.

Williams notes: “At Prescient Investment Management, we remain committed to providing our clients with certainty in an uncertain world while playing our part in building a better future for all. We pride ourselves on our systematic investment approach and believe that the release of our 2024 Responsible Investing Report highlights our commitment to industry-leading practices.”

Prescient’s report acknowledges the importance of alignment with emerging regulations, including South Africa’s new Climate Change Act and the International Sustainability Standards Board’s disclosure standards. Such standards are pivotal in supporting transparent, globally-aligned ESG reporting, making South African companies more competitive and attractive to global investors prioritising sustainability.

“As ESG continues to evolve, we are setting the benchmark for meaningful responsible investing, grounded in data and backed by a robust policy framework,” concludes Williams. “Our commitment to sustainable finance remains firm, as we work to create a resilient investment environment for our clients and a better future for our communities.”

The report can be downloaded here