Quoted companies and ESG relevance

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Professionals in the securities market are under pressure to upscale their skills to offer superior investment advice in the rapidly changing global business environment.

It is settled in securities analysis and portfolio management that every investment is a trade-off of risk and return. An investor’s ultimate goal is to maximise return and minimise risk. The higher the risk, the higher the return and vice versa. This explains why speculators have a high-risk appetite. Their portfolio is top-heavy with assets such as equities, commodities, high-yield bonds, commodities and even real estate. These assets have a significant degree of price volatility.

Given the dynamics of changes in the global economy, there is a new trend of risk aversion strategy that enables an investor to beam its lens on the risk profile of a company ahead of investment decisions. In 2005, the United Nations and Swiss Federal Department of Foreign Affairs published a report titled, “Who Cares Wins.

A content writer, Jane Courtnell in June 2022, wrote a piece, titled, “ESG reporting: How does it differ from sustainability reporting?.” According to her, ESG and sustainability have similarities and differences when she posited that, “The term ESG seems to act as a synonym for sustainability, yet the interchangeable use of these two terms is incorrect. ESG and sustainability are both strategic considerations for businesses, executive teams, and investors.

 

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