Renée Bonorchis

Editor at Large

CADIZ African Harvest Asset Management this week joined a handful of fund managers in SA to put their names behind socially responsible investments.

Heather Jackson, head of the Cadiz Social Responsibility Investment division, said Cadiz wanted to have a higher “social impact” and had started a joint venture with a Cape-based company called GreaterGood.

Headed by Tamzin Ratcliffe, GreaterGood identifies development projects throughout the country with high “social impact” and strong returns.

The organisation, which with the JSE’s endorsement has set up the South African Social Investment Exchange, said it had channelled R6,5m into 38 projects in less than two years.

Cadiz — like one of its predecessors in this

Jackson said by comparison to the number of assets under management in socially responsible investment funds in developed countries, SA’s record to date was “pretty pitiful”.

Quoting from a report by the University of SA’s Centre for Corporate Citizenship, Jackson said the majority of asset managers participating in a survey were doing nothing or allocating a very limited proportion of assets to socially responsible investment.

“It’s not a surprise, but it is a great source of opportunity,” Jackson said. Many pension funds thought that social responsibility investment meant choosing a socially responsible asset manager — not mandating that funds go towards such projects.

Jackson said, as have many before her, that social responsibility investments did not mean lower returns and should, given that they concentrate on sustainability, yield higher returns than other funds over time.

While Jackson did not advocate that assets be prescribed, she was keen on some sort of regulation.

She said authorities such as the treasury could help to encourage social responsibility investment rather than leaving it to the market, where pension fund trustees and asset managers seemed apathetic.

The treasury said yesterday that social responsibility investment was something it was considering as part of the retirement fund reform process which started in December 2004.

Source: Business Day