The Future of Sustainable Investments

Global stakeholders are looking to African governments and corporations to deliver on long-term investments that generate economic returns, and top investors are pushing for metrics that show positive estimates, reports Raheem Akingbolu 

Since 2006, the United Nations has consistently advocated for investments that take into account ESG issues. The gradual transition to a green world, on the other hand, has been laboured by many developing countries, which require massive capital and technology to carry out.

Nigerian businesses are now implementing environmental, social, and corporate governance (ESG) policies that promote sustainable management, responsible investment, and economic development. VFD Group Plc, a sector-agnostic proprietary investment firm, is toeing that line.

The ESG Policy of VFD Group Plc provides solutions to the renewed interest in sustainable investments that protect financial performance while also contributing to global issues such as climate change.

Inside the ESG Portfolio

ESG policies require corporations to consider environmental, social, and governance realities in addition to shareholder wealth in order to achieve long-term growth.

The term ESG is widely understood as a topic that includes environmental issues such as deforestation, biodiversity, and greenhouse gas emissions, pollution (air, land, and water), natural resource usage, and waste management. Human rights, labour standards in the business and supply chain, occupational and community health and safety, stakeholder engagement, a grievance mechanism, and social opportunities are examples of social issues. Governance issues include a set of rules or principles that define human rights, responsibilities, and expectations among various stakeholders in corporate governance (corporate governance and corporate actions).

VFD Group Plc’s ESG policy applies to all three sectors, ensuring compliance, good corporate governance, and transparency in its operations.

Impact of Green Economy 

Sub-Saharan Africa is expected to experience some of the most extreme temperatures. According to a World Bank analysis, “the region is directly and indirectly exposed to the transition risks associated with climate change,” which is exacerbated by the region’s reliance on minerals, energy, and mining. Furthermore, financial sector regulations that are rapidly being implemented in the European Union and are being harmonised globally will have an impact on all companies involved in supply chains that intersect with African countries.’

Global stakeholders are looking to African governments and corporations to deliver on long-term investments that generate economic returns, and top investors are pushing for metrics that show positive estimates.

According to the International Finance Corporation’s analysis of African markets, transitioning to a greener economy will increase profits for manufacturers, create more jobs, and attract more investment to the continent. A green economy, in essence, creates healthier businesses in African countries such as Nigeria.

According to a report by the Global Sustainable Investment Alliance, sustainable investments now account for more than $39 trillion in five major global markets, a 34% increase in two years.

Other studies show that over a ten-year period, sustainable investments outperformed general markets. This implies that ESG funds can generate higher long-term investment returns.

A good ESG integration in a company like VFD Group Plc will naturally assist investors in adapting to the risks of economic, social, and governance changes, as well as taking advantage of green investment opportunities.

Through effective relationships with relevant stakeholders, activists, and global organisations, the Group can accelerate economic growth for the country and its businesses.

Few organisations have developed green investment plans to keep up with the times, but corporate organisations such as VFD Group Plc, PwC, Reckitt Benckiser, and some oil and gas companies have taken up the baton and established ESG policies.

The Group’s Mandate

VFD Group Plc is at the forefront of developing future sustainable investments by implementing policies that are in line with global standards and delivering the best investment results to investors and clients.

The Group’s ESG policy prioritises managing the interests of stakeholders such as governments, regulators, clients, investors, the board, and other stakeholders.

Driven by risk management, business opportunities (market access and revenue growth), cost savings, innovation, productivity through improved management, and brand enhancement, the Group will champion the adoption of best corporate governance practises while performing fiduciary duties by ensuring financial and non-financial risks are modelled into its investment feasibility analysis and decision-making process to ensure long-term sustainable value for all shareholders.

In terms of human capital, VFD Group Plc intends to foster a unified culture based on innovation, inclusion, and diversity, as well as to ensure the recruitment, development, and retention of the best talent across the firm and investments.

The Group will ensure that all investments, loans, leases, and other services aim to reduce negative environmental impacts while enhancing positive effects, and that customers are well informed about the financial and non-financial risks associated with its savings and investment services.

The Group is dedicated to delivering the necessary innovative strategies to improve opportunities in equity investments, mortgages, leases, loans, and asset management.

“As a member of the investment sector, we recognise the importance of working with stakeholders and governments to build globally healthy economies.” As an organisation concerned with the conditions of the country’s economic growth, we promote the tenets of diversity, integrity, transparency, and sustainability,” Nonso Okpala, Group Managing Director of VFD Group Plc stated.

By aligning with the United Nations Sustainable Development Goals (UNSDGs), the Paris Agreement, and Africa Agenda 2063, the Group will advocate for public policies that are in the long-term interests of its clients and support local communities and global society toward sustainable development. These will be accomplished through the development of services and products that promote sustainable development, as well as through corporate social responsibility. VFD Group Plc will conduct business responsibly by joining the United Nations Global Compact (UNGC) and the Principles for Responsible Investment (PRI).

The ESG policy will be implemented across the VFD Group’s portfolio companies while adhering to each company’s corporate strategy, value, and economic and financial growth model. The Group has repeatedly demonstrated its ability to overcome competitive challenges, reduce risks, and improve investment performance across a wide range of markets.