Online Reporter
Sikhulekelani Moyo
Zimpapers Business Hub
ENVIRONMENTAL, Social and Governance (ESG) investments are no longer an option, but a strategic imperative, which funds should also prioritise to drive sustainability.
Experts say integrating ESG into investment strategies is not just about ethics, but it’s also about analytics.
In a recent pensions magazine published by the Zimbabwe Association of Pension Funds, experts said pension funds manage billions in assets and serve millions of contributors and retirees.
Therefore, their investment decisions have ripple effects across markets, communities, and ecosystems.
“ESG integration helps pension funds mitigate long-term risks like climate change, regulatory shifts, and reputational damage, align with stakeholder values, including members, regulators, and the public and capture emerging opportunities in green technologies, inclusive governance, and ethical innovation,” reads the article.
“But to do this effectively, pension funds must move beyond qualitative assessments and embrace data-driven ESG analysis.
“Quantitative ESG integration begins with scoring. Companies are rated based on environmental impact, labor practices, board diversity, and more. These scores are aggregated from multiple data providers and normalised for consistency.”
The article stressed that ESG can be treated as a factor, similar to value, momentum, or volatility.
Bongani Ndlovu