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INVESTOR APPETITE FOR SUSTAINABLE INVESTMENT IS PAYING OFF
By Sonia Du Plessis, CFP®, Brenthurst Wealth Management
Investors’ growing appetite for sustainable investment vehicles is paying off, even as lingering doubts about the strategies persist for regulators and some asset managers.
Environmental, social and governance (ESG)-focused investment products were introduced more than a decade ago, and have now begun recording returns on par with, or better than, funds built purely for risk-weighted performance – a trend that runs counter to the notion that taking ESG into account means leaving money on the table.
Sustainable investing has blossomed into a $22.8-trillion global industry with 84% of asset owners around the world currently weighing, or already pursuing ESG investments, according to a recent report from the Morgan Stanley Institute for Sustainable Investing and Morgan Stanley Investment Management Inc.
In SA, the MSCI South Africa ESG Leaders Index, which focuses on companies with higher sustainability performance than their peers in their sector, was launched in 2007.
It shows that ESG leaders recorded 14.45% annualised gross returns over a ten-year period compared with 9.75% for MSCI South Africa – an index tracking the performance of SA equities.
The success of these instruments reflects the fact that investors are increasingly conscious of the social and environmental consequences of the decisions that governments and companies make.
They can be quick to punish companies for child labour practices, human rights abuses, negative environmental impact, poor governance, and a lack of gender equality. Pair this with an increase in regulatory drivers post-2008 financial crisis, and a deepening understanding of the climate crisis and associated risk to performance, and we begin to see more clearly the need for investment models that will better address investors’ concerns.
Despite its growing popularity, especially among millennials, impact investing is still plagued by certain myths and not well understood by all consumers. With a wide range of investment options and ever-changing definitions of industry terms, this space can be confusing for consumers.
So, if you want your investments to be socially responsible, best you discuss your requirements – and any related concerns – with your financial advisor who will assist you to understand your options.
Socially responsible investing (SRI) can be as simple as opening a bank account, where some of the bank’s income is diverted to green initia-tives. But there are also exchange-traded funds (ETFs), unit trusts, bonds and even property developments that meet SRI criteria.
GLYN OWEN, Investment Director and Director of Momentum Global Investment Management and Fund Manager of the well-performing Brenthurst Global Equity Fund, says without question SRI/ESG is beginning to have a significant influence on investing. “It has been a topic for some years, particularly in the area of ethics (tobacco, alcohol, weapons), but has moved on to a whole new level in recent times, encompassing much broader environmental and governance issues.
At first it was institutional investors who took most interest, but we are beginning to see retail and HNW (high-net-worth) investors also taking an interest. This is more than a theme; it is something which has taken root and is likely to be an increasing consideration for investors and investee companies in the years ahead.
“Changing consumption habits driven by the drive for sustainability and SRI/ESG issues are here to stay and will have an impact on companies and investments. There will be winners and losers and identifying them will mean an increasing focus on sustainability,” Owen added.
TONY BELL, award-winning portfolio manager at Mi-Plan and manager of the Global IP Opportunity Fund in Brenthurst Wealth’s suite of options, says in order to stay relevant, companies need to inno-vate and be sensitive to change in market and consumer dynamics.
It is also important to determine which issues matter to you. Are you more passionate about protecting the environment or promoting work-place diversity? Do you want to make a difference in your community or at the national level?
There are several options available. For instance, corruption has been a burning issue in South Africa for several years now and local asset manager Sygnia – whose Sygnia 4th Industrial Revolution Fund is included in the Brenthurst Wealth fund portfolio – donates all fees earned on its Sygnia Money Market Unit Trust Fund, class S1 & S2 to-wards organisations that fight this issue.
Investors should also be aware that not all SRIs have the same impact. One unit trust may screen only for environmental factors but does so across entire industries. Another may support shareholder resolutions in the shares within their portfolio, which push ESG compliance and reporting. Your advisor will guide you to the investments which will deliver the type of change you are hoping to see.
Your planner will also assist in measuring the per-formance or effectiveness of your impact-sensitive portfolio. A range of new indices in this space is being launched, whether MSCI or S&P Dow Jones, which can serve as benchmarks for one. S&PDJ in SA have four of these indices already in place.
But investors should remember that there are two inherent goals of socially responsible investing: social impact and financial gain. The two do not necessarily go hand in hand; just because an investment touts itself as socially responsible doesn’t mean that it will provide investors with a good return. An investor must still assess the finan-cial outlook of the investment.
So, it doesn’t matter how passionate you feel about something, you cannot put your nest egg at risk to realise it. As they say: you can’t take care of anybody else, if you can’t even take care of your-self. But that doesn’t mean you can’t make a differ-ence. Just rely on your financial advisor to make sure you do while constructing a portfolio suited to your financial goals.
Brenthurst
CONSULT ANY OF BRENTHURST’S FOURTEEN HIGHLY-QUALIFIED INVESTMENT ADVISORS WHO CAN ASSIST YOU IN CREATING A TRULY GLOBAL INVESTMENT PORTFOLIO
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Megan joined the Brenthurst Wealth team in March 2026 as an Administrative and Fiduciary Services Assistant at our Val de Vie Office in the Western Cape. Prior to joining Brenthurst, Megan gained three years of experience in the retail sector, where she developed management and client service skills.
I obtained my National Diploma in Financial Information Systems from the Cape Peninsula University of Technology in 1999 and have worked in the wealth management industry since January 2000. Over the years, I have gained extensive experience in various roles, including Portfolio Manager Assistant, Planner Assistant, and Paraplanner.
Esmarelda Isaacs-Andreas joined the Brenthurst Wealth Stellenbosch office in October 2025, taking on the dual role of Receptionist and Fiduciary Administrator.
I obtained my National Diploma in Financial Information Systems from the Cape Peninsula University of Technology in 1999 and have worked in the wealth management industry since January 2000. Over the years, I have gained extensive experience in various roles, including Portfolio Manager Assistant, Planner Assistant, and Paraplanner.
Ashley joined Brenthurst Wealth in January 2025 as Office Administrative Assistant and Receptionist for the Stellenbosch Office.
René Heystek joined Brenthurst Wealth in November 2023, as receptionist and administrative assistant in the newly established George/Garden Route office.
Michelle Heystek has built a career in the financial services over the last two decades, after obtaining her B.Com degree in Financial Management in 2005. Once she joined Brenthurst in 2006, she continued her academic journey, obtaining her Certificate in Wealth Management from INSETA in 2007, followed by a Postgraduate Diploma in Financial Planning from the University of the Free State. In 2008, she earned the Certified Financial Planner (CFP®) designation.
Anelle joined Brenthurst Wealth as a Receptionist and Administrative Assistant to Brian Butchart in the Cape Town office in December 2023. She has a wealth of knowledge from working as a liaison between Financial Advisers and clients at TMA and Absa Investment Management Services (Aims) since 1998. She obtained her B. com degree from the University of Port Elizabeth in 1997.
ADMITTED ATTORNEY | FINANCIAL PLANNER & HEAD OF BRENTHURST FOURWAYS
Sanet was appointed in April 2020, joining our Cape Town team as an Executive Administration Assistant to Renee Eagar. She has been in the financial services industry since 1990. Her previous experience includes positions at Sanlam, BJM and ABSA. She spent her last 12 years working at Alexander Forbes Private Client Wealth as a Senior Wealth Management Assistant. She has received numerous accolades over the years which include but not limited to, Alexander Forbes Client Service Excellence – Silver award in 2014,2015 and 2017. Sanet has also obtained her Certificate in Wealth Management (NQF 5) in 2012 and achieved “Best Student of the Year” from Moonstone.
Maria Smit is a Certified Financial Planner® with over 10 years of experience in the financial planning industry.
