“Inequality and unemployment have become synonymous with South Africa,” said Elias Masilela – Director of DNA Economics and a part-time commissioner on the National Planning Commission. “Whatever we have been doing has been delayed and has proven inadequate.”
For example last year the Bertha Centre at the UCT Graduate School of Business launched the country’s first social impact bond to drive Early Childhood Development targets in the Western Cape; Ashburton manages a job fund to drive work opportunities and Old Mutual boasts a range of ESG compliant unit trusts, but industry players say that is not nearly enough to effect proper and sustainable change.
It seems the need amongst individuals to get more involved in social and environmental initiatives is already present and growing. Investors s are becoming more interested in options aligned with personal values, and Masilela said the boards of trustees of SA’s respective retirement funds need to start applying the required pressure on behalf of the members.
Social pensions, retirement plans based on a response or impact investing strategic asset allocations, have been piloted with promise in several jurisdictions across the globe. “Global trends and SA’s growing involvement in the movement shows that introducing local offerings is consistent with trustee fiduciary duties, strengthen the relevance of plan offerings to beneficiaries and expand the retirement community’s contribution to sustainable development in Africa,” said Heather Jackson, head of Impact Investing at Ashburton Investments and founder of the Responsible Investing Subcommittee at The Association for Savings and Investment South Africa .
In the meantime, the supporters of the investment philosophy have now turned to the heart of retirement capital – the contributors and the trustees who represent them. The latter was well represented at the Riscura event. “The best way to change investment behaviour is by incentive, not by the stick of the law,” he said. He referred specifically to Black Economic Empowerment rules and the increases in the stringency of labour laws, which he said had failed to make any real improvement to the broader economy or its participants or entice corporates to fund development.
It has actually lead to the establishment and development of a brand-new investment class and a whole alternative industry has been growing around it. The Section 12J investment class is anticipated to increase from R3.7bn to R5.5bn by the end of the current financial year, with the alternative stock exchange ZARX now listing Section 12 vehicles to streamline the process and bring more liquidity to the market.
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