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The drive for socially responsible investment (SRI) continues to gain support, both in developed and underdeveloped economies. According to the Global Sustainable Investment Alliance, as of 2016 more than $22 trillion in assets were being managed under various SRI strategies across the globe, with Europe, the United States and Canada taking the lead in recent years.
Interestingly, one country that is often left off the map when talking about the growth of SRI is Israel. Best known as an incubator for startup industries, it’s played a major role in revolutionizing the way today’s technology is used to address the world’s greatest environmental and social challenges. Companies like Netafim, Salt of the Earth, the Strauss Group and Shikun & Binnui helped cement Israel’s standing on the Economist’s 2016 list of the world’s most socially innovative nations. They have also helped to affirm that environment, social and governance (ESG) factors can, and should have a role to play in the ranking of Israel’s most innovative companies.
In recognition of this growing focus, in November 2017 the Tel Aviv Stock Exchange (TASE)launched two new sustainable investment indices: Tel Bond-CPI Linked Maala and the Tel Bond-Shekel Maala. The move also dovetailed with a request by Israel’s Ministry of Finance’s capital markets commissioner to report on ESG considerations (link in Hebrew).
But just what makes a good, sustainable investment when it comes to Israeli companies? How do potential shareholders know their investments will meet today’s ethical standards when it comes to environmental, social and governance (ESG) criteria– the accepted benchmarks of sustainability in today’s marketplace?
Those are questions that Nordic investment rating companies deal with all the time, and not just when it comes to Israeli SRIs, said Anette Andersson. Andersson is a portfolio manager & ESG investment specialist for SEB Group in Stockholm, Sweden. She said that there is a strong movement in Nordic countries to encourage investors to be transparent and publicize their fossil fuel investments.
“[We] like to see companies report on their own carbon footprint so that we can tell our clients how much of their money is actually vested in carbon,” Andersson said.
Read the full article on SRI opportunities in Israel by Jan Lee at TriplePundit.