Investing in-line with ESG standards carries a lower risk

Investing in-line with ESG standards carries a lower risk

Companies which meet the environmental, social and corporate governance (ESG) criteria are growing in a more stable way and investing in them bears a significantly lower risk – Rafał Lis, the managing partner of CVI told PAP Biznes.

“Companies which meet the environmental, social and corporate governance (ESG) criteria are more aware of the changes which are taking place globally, which helps them better forecast their future situation and act in a stable and balanced manner. This socially responsible way of doing business translates into potentially lower risk for the companies which we finance” – states Rafał Lis.

“It is common for institutional investors on international markets to inquire about ESG-related issues. We have not observed this here yet, but national investors should also demand meeting certain criteria by the companies and funds they invest in. ESG will become more common once investors realize that these investments carry significantly less risk” – he added.

CVI manages six closed-end investment funds with various risk profiles on behalf of Noble Funds TFI. Assets under management currently amount to ca. 5 bln PLN. CVI specializes in corporate private debt investments. These funds provide financing mostly for mid-size enterprises, with investment amounts ranging from 8 to 80 mln PLN and investment horizons of 2-4 years. During the investment decision-making process, they also assess companies based on measurable ESG criteria, properly selected to match each company’s industry and profile.

“Market experience from the past few years shows that investing in-line with EST simply pays off. While making investment decisions for the debt funds managed by CVI regarding financing company projects, apart from traditional financial criteria, we also consider an array of non-financial criteria – related to ESG. This helps us better select the projects which we want to realize” – said the managing partner of CVI.

“We are supposed to maximize returns for our investors, recognizing that responsible actions of the companies we finance contribute to risk reduction. This is why we have permanently implemented ESG criteria to our investment process and developed an internal ESG rating methodology. Additionally, as a PRI (Principles for Responsible Investment) signatory, we have formalized our approach to ESG and voluntarily committed to reporting in this field” – he added.

The full article can be found here.