Sanlam Investments Tops Leader Ratings For Impact Investing

Strong momentum for business’ sustainable investment ambitions

Sanlam Investments recently placed in the top three of five of its major markers, demonstrating how the investment house is delivering on its commitment of leading sustainable investment across the continent. This is according to the African Investing for Impact Barometer released earlier this year.

In its 2022 Sustainable Investments and Impact Report released today, the business outlines the extent of its sustainable investment activities over the past year. This includes:

• 41 active shareholder engagements spanning remuneration practices, board strength and diversity, ESG controversy, environmental risks and multiple ESG issues.
• 3976 shareholder resolutions through proxy voting, 90% voted for and 10% voted against. Of those voting against: 46% was for declining resolutions related to remuneration, 33% against director re-election/appointment, 16% against access to capital and 5% against other.
• Investments through the Investor’s Legacy Range, an initiative launched during Covid-19 to help the economy and business recover by financing business and helping create or preserve thousands of jobs.

Nersan Naidoo, CEO of Sanlam Investments, says the commitment to embedding sustainable investing in every aspect of the business has gathered major steam over the past year. “The year 2021 was for laying foundations; we formed a partnership with international asset manager and leading sustainable investment house, Robeco, staffed up with experts in this area and developed ways of working. What we’ve seen in 2022 is strong momentum and real, measurable outcomes.”

Sanlam Investments scored highly in the barometer categories of ESG Integration, Investor Engagement, Screening, Sustainability-themed Investment and Impact Investing. Naidoo says this independent review shows that the company’s ambitions are showing up strongly in its day-to-day activities.

With over R540-billion in assets under management, the business is using its financial muscle to invest for impact in the areas of environment, society and governance.

“Our well-defined processes allow us to make investment decisions based not on the ‘noise’ but on the reality of what is going on in a company. Glencore, a case study outlined in the Sustainable Investments and Impact report, is one example of this. We’ve dug deeply into the stock and know that it has a huge role to play in the circular economy. It is one of the world’s largest recyclers of end-of-life electronics, batteries and battery metals.

“So, while it may take some time for a market applied “governance discount” to be fully removed, the risks of similar bribery and market manipulation incidents re-occurring are now significantly diminished. On this basis, the potential value upside far outweighs the risks the company faces – even after taking ESG factors into account,” Naidoo says.

Glencore is trading at a discount which offers strong potential upside for investors while at the same time scoring well on ESG factors.

Naidoo says, “Investing for impact and sustainability can be driven more rapidly through alternative investments. We have seen quick and profound successes from our Private Equity, SME Debt teams and Infrastructure teams. Much of our early impetus has come from those areas.

“Driven to reduce inequality in South Africa, the Investor’s Legacy SME Debt Fund has provided finance to small and medium businesses and, in the process, protected or created thousands of jobs. Investing in the Devland social housing project in Soweto is a great example. The building of 26 three-storey buildings with 870 one, two or three-bedroom rental apartments has helped to facilitate housing in a part of the rental market that is vulnerable and underserved. As a ‘green certified’ project, the project will save 20% in building electricity and 20% in water,” he says.

Another project with tangible impact is our Private Equity team’s investment in Absolute Pets. The specialised pet food and supplies retailer expects to open at least 15 new stores next year, creating three to four new jobs per store. The investment also helped secure the jobs of the existing 370 full-time staff members.

The Sanlam Investments Sustainable Infrastructure Fund was launched in September 2021 with the goal of investing in local projects for market development and job growth. With an emphasis on environmental sustainability, the fund has made x investments in its first year.

“Notably, the Bokpoort Concentrated Solar Power plant is one of the first concentrated solar power projects under the South Africa’s Renewable Energy Independent Power Producer Programme. As a public-private partnership, the plant has a gross capacity of 55 megawatts and will provides employment to 61 people.”

Naidoo concludes: “The past two to three years have been seminal for us. Not only is our commitment to investing for good coming through externally, but also internally, with a series of staff-driven sustainability projects. These include a roof-top vegetable garden at our Tygervalley offices as well as vegetable gardens at Valley Pre-Primary and Klippies Kids Pre-School, feeding over 600 children daily and, making an impact on the communities in which we operate.

“In the National Development Plan, it states that we have inherited a mixed legacy of inequalities in South Africa. It is clear that in navigating a new world to create positive outcomes and mitigate the negative ones, asset managers need to work together with the public sector and each other to change the narrative and alter the course of history, as 2050 and net zero rapidly approach. We look forward to playing an increasingly meaningful role every year going forward.”

Download the full Sustainable Investments and Impact Report 2022 here.

Disclaimer

Sanlam Investments consists of the following authorised Financial Services Providers: Sanlam Investment Management (Pty) Ltd (“SIM”), Sanlam Multi Manager International (Pty) Ltd (“SMMI”), Satrix Managers (RF) (Pty) Ltd, Graviton Wealth Management (Pty) Ltd (“GWM”), Graviton Financial Partners (Pty) Ltd (“GFP”), Satrix Investments (Pty) Ltd, Amplify Investment Partners (Pty) Ltd (“Amplify”), Sanlam Africa Real Estate Advisor Pty Ltd (“SAREA”) and Simeka Wealth (Pty) Ltd; and has the following approved Management Companies under the Collective Investment Schemes Control Act: Sanlam Collective Investments (RF) (Pty) Ltd (“SCI”) and Satrix Managers (RF) (Pty) Ltd (“Satrix”).

The information does not constitute financial advice. While every effort has been made to ensure the reasonableness and accuracy of the information contained in this document (“the information”),  The FSP’s, its shareholders, subsidiaries, clients, agents, officers and employees do not make any representations or warranties regarding the accuracy or suitability of the information and shall not be held responsible and disclaims all liability for any loss, liability and damage whatsoever suffered as a result of or which may be attributable, directly or indirectly, to any use of or reliance upon the information.