The term “sustainability” has found its way into our everyday lives. It has also found its way into the finance world, where it has become one of the main drivers to change investor behaviour.
Even though sustainability seems to be omnipresent these days, there is still a lot of uncertainty, especially when it comes to investments. One of the reasons for this uncertainty is the fact that various terms and definitions are used in its context: environmental, social and governance (ESG), responsible investing, sustainable investing and impact investing.
Why is responsible investing relevant?
When talking about the growing relevance of responsible investments, three key drivers can be identified. The first is performance. Evidence suggests that ESG-focused companies fare better economically, which is mirrored in financial markets by better risk-adjusted returns.
Second, there are the investor’s objectives. Sustainability is a structural force, a shift in our society’s mindset. Consciousness about environmental preservation, climate action and social responsibility has grown, leading to more investors aligning their wealth with their beliefs and values.
The third driver – and this is probably the one that is currently gathering the most momentum – is regulation. Even before the pandemic, companies were already facing significant pressure from regulators to become more sustainable and responsible for their actions.
Do responsible investments pay off?
The short answer is yes, they do. The integration of the ESG perspective improves an investor’s ability to identify and understand the opportunities and risks.
The economic logic is straightforward. First, sustainability in part determines the long-term growth potential of a market and business. Second, responsible practices define an organisation’s quality overall.
ESG leaders are long-term thinkers. They are agile, transparent and accountable. They tend to perform financially better in the long term because they are early in adjusting their strategy to structural change and because they control their everyday operations more closely.
The Covid-19 pandemic has proven this logic to a large extent. There are exceptions and dependencies to the rule. Responsible investing is no recipe for everyday outperformance.
Besides the fundamental quality, there is also a market valuation. There are always phases in which some ESG leaders are too pricey or some ESG laggards seem too inexpensive. So far, this year, oil and gas have outperformed clean energy, but the opposite applied in 2020.
What are the challenges with ESG data?
The evolution of ESG data is pivotal to the evolution of responsible investing. It all began with exclusions of values-adverse sectors such as tobacco because of the simplicity of such an approach and because reliable ESG data was not available.
In the meantime, the comprehensiveness of ESG data has improved significantly. In terms of ESG data, we see three categories distinguished by the point of view and the relevance of human or artificial intelligence: reported, reviewed and processed ESG data.
A sound, reliable and comprehensive process builds on sourcing data from different categories to complement each category’s caveats. Several challenges remain. For example, governments as issuers of bonds require a different framework than corporates. Not least due to less reliable and less comprehensive data, the “ESG-ising” of sovereign bonds lags far behind the process of any corporate stock or bond.
The way forward
Responsible investing, ESG criteria and sustainability are the buzzwords investors can no longer ignore. This theme is here to stay and will shape the future of finance, not least as regulations begin to drive the dynamics.
We see a shift from standardised ratings to customisable themes, in part because at its core, the theme will always rest on individual beliefs and personal values.
Responsible investing, ESG criteria and sustainability are the buzzwords investors can no longer ignore
Norbert Rücker,
head of economics and next generation research at Julius Baer
There is a strong economic rationale investors should care about: sustainable value creation requires responsible practices. Companies that think long term and take a stakeholder perspective tend to show agility, better control of operations, more prudence with financials and often receive a higher valuation by financial markets.
The journey going forward includes anything but boring tasks: establishing ESG frameworks for sovereigns, which are mostly non-existent today, introducing engagement practices to foster investor responsibility, addressing the various forms of greenwashing and giving a reality check to the narrative that investments have a carbon dioxide footprint.
Norbert Rucker is the head of economics and next generation research at Julius Baer
UAE currency: the story behind the money in your pockets
UAE currency: the story behind the money in your pockets
The biog
Favourite film: Motorcycle Dairies, Monsieur Hulot’s Holiday, Kagemusha
Favourite book: One Hundred Years of Solitude
Holiday destination: Sri Lanka
First car: VW Golf
Proudest achievement: Building Robotics Labs at Khalifa University and King’s College London, Daughters
Driverless cars or drones: Driverless Cars
The specs: 2018 Ducati SuperSport S
Price, base / as tested: Dh74,900 / Dh85,900
Engine: 937cc
Transmission: Six-speed gearbox
Power: 110hp @ 9,000rpm
Torque: 93Nm @ 6,500rpm
Fuel economy, combined: 5.9L / 100km
Gothia Cup 2025
4,872 matches
1,942 teams
116 pitches
76 nations
26 UAE teams
15 Lebanese teams
2 Kuwaiti teams
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Company Fact Box
Company name/date started: Abwaab Technologies / September 2019
Founders: Hamdi Tabbaa, co-founder and CEO. Hussein Alsarabi, co-founder and CTO
Based: Amman, Jordan
Sector: Education Technology
Size (employees/revenue): Total team size: 65. Full-time employees: 25. Revenue undisclosed
Stage: early-stage startup
Investors: Adam Tech Ventures, Endure Capital, Equitrust, the World Bank-backed Innovative Startups SMEs Fund, a London investment fund, a number of former and current executives from Uber and Netflix, among others.
SPECS
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Company profile
Company: Eighty6
Date started: October 2021
Founders: Abdul Kader Saadi and Anwar Nusseibeh
Based: Dubai, UAE
Sector: Hospitality
Size: 25 employees
Funding stage: Pre-series A
Investment: $1 million
Investors: Seed funding, angel investors
Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
Match info
Huddersfield Town 0
Chelsea 3
Kante (34'), Jorginho (45' pen), Pedro (80')
Killing of Qassem Suleimani
Scoreline
Ireland 16 (Tries: Stockdale Cons: Sexton Pens: Sexton 3)
New Zealand 9 (Pens: Barrett 2 Drop Goal: Barrett)
Company profile
Name: Thndr
Started: October 2020
Founders: Ahmad Hammouda and Seif Amr
Based: Cairo, Egypt
Sector: FinTech
Initial investment: pre-seed of $800,000
Funding stage: series A; $20 million
Investors: Tiger Global, Beco Capital, Prosus Ventures, Y Combinator, Global Ventures, Abdul Latif Jameel, Endure Capital, 4DX Ventures, Plus VC, Rabacap and MSA Capital
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
COMPANY%20PROFILE
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The Two Popes
Director: Fernando Meirelles
Stars: Anthony Hopkins, Jonathan Pryce
Four out of five stars
Premier Futsal 2017 Finals
Al Wasl Football Club; six teams, five-a-side
Delhi Dragons: Ronaldinho
Bengaluru Royals: Paul Scholes
Mumbai Warriors: Ryan Giggs
Chennai Ginghams: Hernan Crespo
Telugu Tigers: Deco
Kerala Cobras: Michel Salgado
Paris Can Wait
Dir: Eleanor Coppola
Starring: Alec Baldwin, Diane Lane, Arnaud Viard
Two stars
F1 The Movie
Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
Director: Joseph Kosinski
Rating: 4/5
The biog
Place of birth: Kalba
Family: Mother of eight children and has 10 grandchildren
Favourite traditional dish: Al Harees, a slow cooked porridge-like dish made from boiled cracked or coarsely ground wheat mixed with meat or chicken
Favourite book: My early life by Sheikh Dr Sultan bin Muhammad Al Qasimi, the Ruler of Sharjah
Favourite quote: By Sheikh Zayed, the UAE's Founding Father, “Those who have no past will have no present or future.”
Scream%20VI
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Profile of Tarabut Gateway
Founder: Abdulla Almoayed
Based: UAE
Founded: 2017
Number of employees: 35
Sector: FinTech
Raised: $13 million
Backers: Berlin-based venture capital company Target Global, Kingsway, CE Ventures, Entrée Capital, Zamil Investment Group, Global Ventures, Almoayed Technologies and Mad’a Investment.
Company%C2%A0profile
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Company%20Profile
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Essentials
The flights
Emirates and Etihad fly direct from the UAE to Los Angeles, from Dh4,975 return, including taxes. The flight time is 16 hours. Alaska Airlines, United Airlines, Delta Air Lines, Aeromexico and Southwest all fly direct from Los Angeles to San Jose del Cabo from Dh1,243 return, including taxes. The flight time is two-and-a-half hours.
The trip
Lindblad Expeditions National Geographic’s eight-day Whales Wilderness itinerary costs from US$6,190 (Dh22,736) per person, twin share, including meals, accommodation and excursions, with departures in March and April 2018.
Most sought after workplace benefits in the UAE
- Flexible work arrangements
- Pension support
- Mental well-being assistance
- Insurance coverage for optical, dental, alternative medicine, cancer screening
- Financial well-being incentives
If you go...
Fly from Dubai or Abu Dhabi to Chiang Mai in Thailand, via Bangkok, before taking a five-hour bus ride across the Laos border to Huay Xai. The land border crossing at Huay Xai is a well-trodden route, meaning entry is swift, though travellers should be aware of visa requirements for both countries.
Flights from Dubai start at Dh4,000 return with Emirates, while Etihad flights from Abu Dhabi start at Dh2,000. Local buses can be booked in Chiang Mai from around Dh50
2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, (Leon banned).
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
The%20specs
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The biog
Hometown: Cairo
Age: 37
Favourite TV series: The Handmaid’s Tale, Black Mirror
Favourite anime series: Death Note, One Piece and Hellsing
Favourite book: Designing Brand Identity, Fifth Edition
