RETAIL investors who want to put their money into listed companies that are committed to sustainable development may have more choices, as this year’s ESG 100 list was announced yesterday.
The Thaipat Institute, a public organisation that promotes corporate social responsibility and sustainable business practices, compiled the list of 100 companies that have passed environment, social and governance assessments.
These companies must meet eco-friendliness, social and profitability benchmarks, said Pipat Yodprudtikan, director of the institute.
He said the ESG assessment would help those looking for investment opportunities in companies that take into account environmental and social issues such as climate change while at the same making a profit out of them.
This is the third annual ESG 100 list, and this year 24 companies were dropped and 24 new ones added, including 10 from the Market for Alternative Investment or those with small market capitalisation, he said.
The 2017 list includes companies from all eight major industries: agriculture and food, consumer products, financial, industry, property and construction, resources, services, and technology.
Among the top five industries, 18 companies are services, 16 are industrial, 14 are in the property or construction fields, 13 are technological companies and 12 are financial firms.
Pipat said those companies that have been making good progress in addressing environment and social issues but have lost money were not qualified for ESG 100. Nor are those that are making a profit but failing in corporate governance and other social issues.
He said backdated analyses indicated that companies in ESG 100 outperformed the overall market. For example, investment over the past 10 years in ESG 100 companies generated returns of 907 per cent, compared with the 217-per-cent average for all firms listed on the Stock Exchange of Thailand. Year-to-date returns on investment also outperformed the market, at 9.8 per cent versus the SET average of 3.9 per cent.
So far only one mutual fund has made it on to ESG 100. The Tisco ESG Investment Fund for Society over the last two years has offered returns on investment of around 20 per cent, he said.
The ESG fund is at least providing a choice for retail investors who want to put their money in a mutual fund. Institutional investors have already been able to access lots of information about sustainable-development companies, Pipat said.
The trend of sustainable investment strategy has been evolving around corporate governance, the environment and profitability, he said.
He said that in the future the Thaipat Institute planned to rank the ESG 100 companies in terms of best performance in order to narrow the choice for retail investors.
“Currently, we cannot rank them because of inadequate information disclosed by firms. We will do it when more information is available.”