Asset Management Strategies for Sustainable Development and Investment

This essay explores the intersection of asset management and sustainable development, focusing on how sustainable practices can impact infrastructure investment. It discusses the growing need for sustainable development in financial decisions, highlighting the threat of environmental degradation and the importance of minimizing its impact. The essay examines key strategies such as impact investing, strategic investments in financial inclusion, the use of green financial instruments, and embedding corporate social responsibility (CSR) within business practices. It references Investec Asset Management as a case study, emphasizing the need for corporations to scrutinize their business practices and incorporate CSR effectively. The conclusion underscores the imperative of sustainable development practices in financing decisions to mitigate environmental threats and promote responsible investment.

Running head: ASSET MANAGEMENT
Asset Management
Name of the Student
Name of the University
Author Note

1Asset Management
Table of Contents
Introduction......................................................................................................................................2
Discussions......................................................................................................................................2
Conclusion.......................................................................................................................................6
References........................................................................................................................................7

2Asset Management
Introduction
Investec Asset management remains the only significant investment management
companies to emerge on the world stage from Africa, among very few emerging markets.
Hendrik du Toit was there from the very beginning joining Investec Group in 1991 and starting
up the Asset Management arm. He is their chief executive offer and manages $105bn for its
worldwide clients.Du Toit stated that the scope for capital expansion is huge nowadays, with
investors less concerned about geographic distance.According to him there is an urgent need for
sustaianble development while dealing in business practises.The threat of environmental
degradation on the world economy increases with every passing day and sustainable
development is a major step in averting this crisis(Hendrik Du Toit, CEO Investec Asset
Management, 2013).
Discussions
Much of the development policy over the last decade– since the adoption of the
Millennium Development Goals – has been stressed towards making use of greater private
investment in developing markets.In view of this, sustainable development and the deployment
of the goals of sustainable development lies on enhancing private investment, as it will greatly
depends on the ability to effectively mobilize both public and private financial resources. The
impact of sustainable development on infrastructure investment are:
Use of Impact Investing- As defined by the Inter American Development Bank, impact
investing implies investments that have an explicit nature that addresses both environmental and
social issues, desired in achieving social as well as and financial rewards. As more and more

3Asset Management
socially driven entrepreneurs establish impact driven businesses, there will be a vast growth of
impact investment opportunitiees.In the 2016 Annual Impact Investor Survey , there were reports
of more than USD 116 billion in capital commited for impact investment since it first came
up(Barman 2015). Also, “social banks” have regularly grown over the years, with financial
institutes like GLS Bank (Germany), Umweltbank (Germany) and Triodos Bank (Netherlands),
to namet a few. They aim to take up social and ecological projects which try to contest the
challenges that exist in the society – beyond looking for capital or maximise profit earning
opportunity. Impact investing’s most uniquely innovated idea is that it drives investors to give
equal attention to the environmental and social impact of private corporates, as well as to
measurement and reporting, impact investing is much more focussed on financial stability and
return on investment over the long term instead of making fast but unsustainable profit. This
encourages financial discipline and more environmentally sustainable practices.
Strategic investments and financial inclusion-With sustainable development needing to be
evaluated and made aware of in the field of investment , developing investment strategies in five
impact areas, all of which are aligned with the sustainable development goals like financial
inclusion, climate change, sustainable infrastructure, sustainable infrastructure and water
conversation is very much a focal point in terms of viewing alternate investment
strategies.Developing a strategy to invest in companies that contribute to development of
financial systems of emerging market economies in order to enable the less fortunate sections of
our society to sustain livelihoods, create assets and generate income can have major
environmental and social benefits.Financial inclusion empowers individuals, businesses and
countries to reach their full economic potential and contribute to the development of the
Sustainable Development Goals(Steinbach et al.2017). Sustainable development emphasizes the

4Asset Management
importance of taking a bottom-up approach for its impact objectives. By enabling an overall
inclusive financial system,the investment sector aims to empower individuals with a setof
financial tools that enables them to prioritize their own strategies in improving their livelihood,
as opposed to a top-down approach that would set the priorities for them(Sardy and Lewin 2016).
Prevalence of Green financial instruments- Green financial instruments are created, either to
increase a project’s revenue generation potential, or boost its capital structure by giving access to
efficient sources of debt and equity. While robust alternatives exist to approach certain
mitigation outcomes , a future might lie where reduction of emissions and standards of
measurement are established through a multilateral approach like the UNFCCC. Such markets
may offer the best long-term value to socially responsible investors. In specific situations and
countries, ther may be possible in increasing revenue through targeted tariff support programs
that might be availble. These opportunities can s be implemented sometimes, combining it with
a carbon finance solution. Green instruments enables climate finance to make available
instruments in assisting with project financing activities such as development grants, loans or
debt facilities,concessional equity and interest rate subsidies. Different investment opportunities
exist depending on the type of project, scale , location, as well as the co-benefits, often referred
to as sustainable development benefits(Scoones, Leach, and Newell 2015).
Embedding CSR-If one examines the recent trends in corporate philosophy and decision-
making, it is clear that business leaders have been showing a premature oversight with short
sighted goals and narrow targets. In some sense, the growing acceptance of corporate social
responsibility is very much an important part of business activity. However, it is also true that
much of what is projected by corporations ,as per their objectives of social responsibility are
generally devoid of any real substance. It is high time for corporations to understand the

5Asset Management
importance of scrutinising all of their business practices by society and their own interests in
formulating a well structured programme incorporating corporate social responsibility. Recently,
their have been too many examples of reputable and well known companies losing trust of the
public and industry competitiveness because of their acute irresponsibility in failing to comply
with the social regulations and engaging in unethical activities(Kolk 2016). Environmental
degradation caused by some of the largest oil companies is well known.Hence it is very much
important for organisations to place a much more important regimen while enforcing CSR, so
that it can contribute to sustainable development.

6Asset Management
Conclusion
With the threat of environmental degradation fast approaching, there is a growing need
for sustainable development practises in financing decisions.It is imperative to minimise that
threat as soon as possible.Embedding CSR , usage of impact investing and investing in green
financial instruments are some of the ways by which sustainable development can impact
infrastructure investment.Hendrik Du Toit is right about the growing need for sustainable
development, and how it is the next evolutionary step in financing decisions.

7Asset Management
References:
Barman, E., 2015. Of principle and principal: Value plurality in the market of impact
investing. Valuation Studies, 3(1), pp.9-44.
Hendrik Du Toit, CEO Investec Asset Management. (2013). [video] Available at:
https://www.youtube.com/watch?v=tWoQLa7oAxE&t=738s [Accessed 9 Jul. 2018].
Kolk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business, 51(1),
pp.23-34.
Sardy, M. and Lewin, R., 2016. Towards A Global Framework for Impact Investing. Volume 7
Table of Contents 2016, p.73.
Scoones, I., Leach, M. and Newell, P. eds., 2015. The politics of green transformations.
Routledge.
Steinbach, A.L., Holcomb, T.R., Holmes Jr, R.M., Devers, C.E. and Cannella Jr, A.A., 2017.
Top management team incentive heterogeneity, strategic investment behavior, and
performance: A contingency theory of incentive alignment. Strategic Management
Journal, 38(8), pp.1701-1720.