Why retail investors should consider socially responsible investment (SRI)
Socially responsible investment is gaining traction globally, with its acceptance into the mainstream providing opportunities for retail investors to participate in this segment. Statistically, the data has revealed growing participation from retail investors with an increase from 13% in 2014 to 25% in 2020.
If you are a retail investor considering SRI, you might be wondering, what’s in it for me?
To sum it up, the value propositions of SRI are:
- Positive impact on the environment
- Positive impact on society
- Generate positive returns
Funding Societies CEO, Wong Kah Meng discussed this at length with an esteemed panel line-up during the Investing in Sustainability for a Better Future Panel Talk at the InvestSmart® Fest 2021. He was joined by the likes of licensed investment advisers and industry experts sharing the latest on investment and financial management, retirement planning, and Shariah and digital investment opportunities.
According to fellow panellist Najmuddin Mohd Lutfi, Chief Executive Officer, BIMB Investment Management Berhad, sustainability is defined as “a system of corporate strategy, business model and operations that integrate Environment, Social and Governance (ESG) factors to create long term economic and social values”.
“SRI hits at the core of what digital financing platforms are meant to achieve, supporting underserved MSMEs to obtain access to financing. Digital financing platforms such as Funding Societies allow early investors to start small and gain a better understanding of SRI, making it accessible to retail investors”, shared Wong Kah Meng during the SRI panel.
Under the Malaysia Co-Investment Fund (MyCIF) programme by the Malaysian government launched during Belanjawan 2021, there were also notable trends of micro and small enterprises that are representing the core of what SRI stands for.
On SRI opportunities that are available in the digital financing space via Funding Societies platform, Kah Meng highlighted some remarkable examples. “We have a batik manufacturer (Batik Boutique) that employs women in the B40 segments. There’s another company that provides technology to big corporations to reduce their carbon footprint and lessen their environmental impact. These are all great examples of the opportunities available”, stated Kah Meng.
In conclusion, aside from bringing about positive environmental and social change, companies that prioritise ESG factors have shown to be more resilient to shocks and could give better returns to investors in the long run.
If you would like to explore more investment opportunities and support our local SMEs, head over to www.fundingsocieties.com.my
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