Investing in ESG – A responsible path to wealth creation

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Investing in Environmental, Social, and Governance (ESG) platforms is a great way to maximize returns while making a positive impact on the world. by focusing on companies that prioritize sustainability, ethical working conditions, and responsible corporate governance. ESG investing has become increasingly popular in recent years, and as more and more investors recognize the importance of this type of investing, it’s becoming easier to find ESG platforms to invest in.

This is a preliminary introduction to ESG investing – from understanding what it is to learning about ESG ETFs as well as Robo-Advisors in this rapidly evolving investment area.

What is ESG Investing?

ESG refers to criteria for evaluating corporate behaviour. ESG evaluation is primarily a tool for helping make investment decisions by identifying the risks of ignoring ESG related risks as well as the rewards of recognizing them. The primary objective of ESG investing is financial returns. ESG investing is not to be confused with Socially Responsible Investing (SRI) or Impact Investing for which the objectives are different. One school of thought is that ESG investing is a first step for many – a positive compromise between solid financial returns and social responsibility. Individuals and corporations can choose to invest in companies that prioritize sustainability, ethical working conditions, and responsible corporate governance. To make this possible, ESG investing must demonstrate benefits versus non-discriminatory market based investment. The proof of this approach is well demonstrated in the graph from Statista above which shows the exponential increase in ESG ETF (exchange traded funds) investments over the last couple of years

Benefits of ESG Investing

There are numerous benefits to investing in ESG platforms, including:

  • Higher Returns: One of the biggest benefits of ESG investing is the potential to earn higher returns. Such investments have historically produced robust returns.
  • Making a Positive Impact: Another benefit of investing in an ESG platform is that you’re making a positive impact on the world. With each investment you make, you’re helping to change the world for the better.
  • Lowering Risk: Another benefit of investing in ESG platforms is that ESG investments are usually considered to be lower risk investments. Of course, this will require lots of due diligence to ensure that you’re picking up the right assets to invest in
  • Diversification: Another benefit of investing in ESG platforms is that it allows you to diversify your investments.

A sample of returns on some of the largest ETFs

A recent article from Motley Fool listed the ETFs below based on information from Yahoo Finance. The reported growth figures over a three-to-five year period are robust. mostly in the double digit percentage range.

Moving away from the large ESG ETFs, outstanding returns have been seen in specialized portfolios. For example, a portfolio which focuses on clean energy curated by a Singapore-based B2B Robo-Advisory fintech represented by Bridge DFS (www.bridgeto.us) returned 40+% p.a. over a 3 year period. If you represent a bank or a company in the area of wealth management please write to sanjiv@bridgeto.us for more information about this portfolio as well as the fintech behind such solid returns.

Beginning your ESG ETF investment journey

Choose the route that you find most convenient and efficient. You could directly visit the websites of the ETF Managers that have some of the larger ESG ETFs. Or use an offline or online brokerage to invest on your behalf. Alternatively, you could connect with your bank or non-bank wealth manager if you’d like less of a DIY approach as well as institutional advice and commentary. Whichever route you choose, due diligence on your part is key. In the last few years, specialist B2B Robo-Advisory firms have augmented the capabilities of wealth managers, enabling them to sift-and-sort through the ETFs available. If you represent a bank or a company in the area of wealth management and would like to know more about B2B Robo-Advisors, please write to sanjiv@bridgeto.us for more information.

Please keep a look out for more information on the ESG space from my blog.

Thanks, Sanjiv

I am a Founding Partner at BridgeDFS, a bespoke digital financial services advisory firm (www.bridgeto.us). Views expressed are my own. I can be contacted at sanjiv@bridgeto.us.

The Bridge DFS Engagement Approach

At Bridge DFS (www.bridgeto.us) we know that by listening to and empathising with our clients and their customers, we can rapidly discover gaps and opportunities. Our aim is to spend 20% of the time taken for typical research to identify 80% of more of the opportunities. With our clients we look for new tools and solutions that are not in place today. And then we invest in thinking, designing building and refining prototype solutions till they meet customers needs before implementing them.

Unlike typical research firms and consultancy organizations which deploy generalists to work on financial services projects, at Bridge DFS we pride ourselves on our industry knowledge and the network of experts in this domain. We use this experience and expertise to help our clients to accelerate their progress from concepts to solutions.

Talk to us to find out how we helped India’s largest payment bank solve a liquidity challenge or how we solved a cash-management problem for a dominant eCommerce player by offering instant lending.

Contact us via http://www.bridgeto.us


“Our life is frittered away by detail. Simplify, simplify, simplify! I say, let your affairs be as two or three, and not a hundred or a thousand; instead of a million count half a dozen, and keep your accounts on your thumb-nail.” – Henry David Thoreau

Making and managing money is a deeply personal and often contentious topic. Equally, the approaches, strategies and methodologies are diverse and often intimidating for most who are not professionals in the arena. Fintech has always played a key role in helping make sense of what to invest in, how much to allocate and when to time entry and exit. The fintech of wealth management or “WealthTech” has evolved from ticker-tape to Robo-Advisory. Asset classes have expanded. Sustainable Investments and Crypto-related assets are no longer the realm of innovators and early adopters.

Typically, Consumer Banking and Private Bank heads are pushed towards “get some fintech”. At Bridge DFS we’ve seen this process play-out, often to the detriment of customers. Hard-nosed and well-experienced wealth management leaders know one truism – the backflow from customer dissatisfaction with WealthTech can have serious impact on the consumer confidence in the bank. Wealth is a skittish entity, moving very quickly away from even the smallest scent of danger. This leads to “analysis paralysis”, especially among larger and more established banks. Which is why smaller and nimbler wealth-focussed consumer fintechs are rapidly gaining traction.

At Bridge DFS, we’ve seen first hand the value of Thoreau’s words – “Simplify, simplify, simplify!” The best solutions for your customers come from simply listening to them. Each financial institution has it’s own “personality” and it attracts it’s own group of customers. There is no “best” solution for every type of customer. However, there is usually a B2B WealthTech solution out there – Robo-Advisory, stock-trading app, client management platform that meets the specific requirements of your institution and customer base. There are hundreds of pretty impressive B2B platforms and at least one of them will meet the needs of your institution in terms of scope, geography and availability. To discover the right fintech solution, the traditional technology-team led, procurement-heavy RFP process is usually inadequate. The dice are biased by legacy tech and the related internal and external service providers.

Instead, we suggest listening and empathising with your customers. Bridge DFS (www.bridgeto.us) can facilitate this via Design Thinking workshops that include your customers’ participation. With your customers, you can rapidly conceptualize and build solution prototypes that meet their needs. This process can augment or even replace expensive, usually inconclusive and time-consuming focus-groups and cost-heavy consumer research.

When you’ve identified a solution or product prototype, Bridge DFS can help you as the business-driver to discover and test the right fintech in a matter of days instead of the several months or even years that it usually takes. This can be achieved through our extensive network of industry partners or via our partner, APIX (www.apixplatform.com), a cost-efficient fintech aggregation platform developed by the International Financial Corporation and the Monetary Authority of Singapore.

With Bridge DFS, you as a decision-maker in the business domain or the innovation domain can control the entire product development process end-to-end. Cost-effectively and highly time-efficiently.

If you are a decision-maker or a key-influencer and would like to know more about how to time-efficiently and cost-effectively onboard WealthTech to your insitution, we’d like to hear from you. sanjiv@bridgeto.us or rajiv@bridgeto.us.

Or visit us at http://www.bridgeto.us.

#fintech#digitallending #digitalfinancialservices #digitalcommerce #digitalbanking #wealthmanagement #innovation #designthinking #mastercard #visa #QIB #ADIB #ENBD #APIX

Quarantine Diary Post#3: Seafaring without sickness

Not even 40 years ago, our port was the destination for business people from the region, arriving by ship after weeks of gruelling travel. And the starting point for traders and entrepreneurs going out to explore far away markets.

For some of our predecessors there was no choice and this was inherent to earning a livelihood. Today, quarantines have replaced those journeys. Weeks of isolation that bookend business trips. I was in a conference call with a colleague from the digital money industry earlier today and she was laughingly recalling that she’s spent more time in isolation since the beginning of the year that out of it. In many of the countries that we operate in, trust can only be built up in person. Therefore travel is still a necessity.

But unlike the journeyers that have gone before us, we are digitally connected, in sanitized comfortable accommodation, our well-being monitored by professionals and still able to work full-time. It’s a matter of getting used to it. I will have to travel again and possibly go through this again. But it’s but a fraction of inconvenience of travel but a few decades ago.

To contact Bridge DFS about your digital transformation in financial services, please visit our website: http://www.bridgeto.us

#ccpn #digitalmoney #digitallending #mastercard #citi #visa #digitalfinancialservices #innovation #designthinking #advisory #singapore

Quarantine Diary Post#2: Making it personal

Image from WeWork, Atlanta, GA

Small businesses, mom&pop stores, solo-preneurs – we are the bulk of the employers around the world. Small businesses are personal – born out of necessity or passion. To keep the home-fires burning we have to soldier on. As much as we would love wfh, its often a luxury.

Many of us to do remarkable things to keep ourselves and our companies safe. An eCommerce store owner I know who has nine employees had to create a safe-distance environment in a tiny working area. The owner moved inventory between desks, creating physical barriers, everybody was double-masked all the time and timings were staggered to reduce in-office presence. All employees were vaccinated and given time-off if there were any reactions. All this while demand jumped up tremendously.

My business partner and I ensure safe-distance at our discussions, we follow a rigid protocol when entering buildings or meeting at office. And always drive separate cars to meetings.

We naturally envy large corporations that get relief but real business does not work that way. It’s about driving the top-line and reducing costs.

We fully appreciate the requirements for quarantines. Challenging as they may be, they keep us safe as well as protect the communities we do business in.