ESG Investments in the Seed and Post-IPO Stages

Environmental, Social, and Governance investing – often categorised as ESG – concerns companies beyond traditional investments to incorporate into their strategy a more global approach. With an emphasis on emerging sectors, ESG investing prioritises the manner in which a company serves all of its stakeholders: workers, communities, customers, shareholders, and the environment as a whole. Generally speaking, ESG investments are also evaluated based on investors’ confidence that a company will use its resources to advocate for social progress in the wider world, beyond the limits of immediate company payoff.

Over the past few years, ESG investing has developed and gained an increased presence across global sectors. Thus, the concept of companies abiding by specific guidelines that reflect sound corporate governance gained significant acceptance across diverse markets. Corporate companies have received incentives for creating positive shareholder return, and performance benchmarks have been implemented for environmental and social performance. These developments have sparked a discourse regarding the impact of company operations on society, as well as the need for conscientious management of capital and the relevant implications for future generations.

Several central principles effectively highlight the reasons ESG investing has become so appealing across modern sectors. Firstly, ESG investing indisputably aids in the protection and preservation of the environment by supporting climate preservation objectives. While it might seem intuitive, it is nonetheless a powerful phenomenon and well-worth acknowledging that companies who consciously work to create a lower environmental impact effectively play a pivotal role in creating a more sustainable world.

Furthermore, a thriving globalised economy promotes objectively better living conditions in every respect. Even in climates of economic instability, if investors believe in and therefore invest capital into companies with intrinsic motivation to advance and improve conditions across the globe, those companies will have a better chance of affecting lasting growth and innovation. This cycle fosters mutually beneficial relationships, as investors generate meaningful returns on their investments in collaboration for their catalysation of positive change.

A representative of Adare Partners, a London-based multi-family office, commented on the value of ESG investments as a vehicle to creating positive change worldwide, stating that “our objective at Adare Partners has always been, and continues to be, driving social justice initiatives while effectively expanding client portfolios within emerging markets and values-aligned companies. Our philosophy at its core depends upon strategic investments into corporations that purposefully manifest a positive feedback loop for the future, both for our clients and the wider world.”

Despite the devastating effects of the COVID-19 pandemic on the global economy, corporations across all industries have continued to drive ESG initiatives with notable potential to cultivate positive change. A prime example is Acclinate, a Tech Startup company working to fight racial disparities in the modern healthcare system. By taking action to boost involvement of minority populations in clinical testing, Acclinate strives to increase the diversity of those represented across all aspects of emerging medical research and development. While the pandemic has exacerbated pre-existing issues within the healthcare system, this company has continued to work tirelessly towards increasing awareness for health-related issues in minority communities. Another corporation exemplifying ESG values is Beyond Meat – a company radically changing the food industry to better suit modern environmental realities. With an emphasis on innovation and sustainability, Beyond Meat has managed to create an appealing and eco-friendly meat alternative, effectively enabling consumers to align living sustainably with their own values and expectations.

Investors with strong moral incentives are organically drawn to companies that deliberately work towards improving their social impact, both within the company and the extended community.

Moreover, companies that make a conscious effort towards implementing true diversity, within their own company as well as pre-existing societal systems, inherently reassure investors that their values are and will continue to be aligned with their moral compass and respected.