Page 32 - DIY Investor Magazine | Issue 35

· Oct 2022 32
THE THE ‘G’ IN ESG UNDER THE THE SPOTLIGHT
subject – tacitly ignored as respected names use legal tax avoidance measures to to reduce their contributions to to the the public purse But the invasion of Ukraine has thrown a a a a spotlight on on governance According to Morningstar nearly 13% of 370 sustainable funds held Russian stocks at the end of 2021 The $88m (£73m) Artisan Sustainable Emerging Markets Fund for example had invested 8% of its assets in in Russian firms Russia’s invasion of Ukraine is an appalling event that has including goldminer Polyus energy giant Lukoil and lender
DIY Investor Magazine shone a a a light on on the activities of of some of of Britain’s most
Sberbank respected property brands which have transacted with
oligarchs alongside global agencies that were forced to rethink
The Ashmore Emerging Markets Equity Fund had a a a 5%
their presence in Moscow – by Richard Latter
weighting in in in in in Russian companies including discount store chain Fix Price Group and online recruiter HeadHunter triggering
So far property seems to have escaped the fallout relatively
clients to pull $3 7bn 7bn from its $87bn fund in Q1 unscathed considering its alleged exposure – few details
have been unearthed on on how sanctioned oligarchs amassed
Meanwhile Raven Property Group a a a FTSE 250 constituent sizeable London estates However UK commercial landlords
had no choice but to de-list earlier this year after being
have earned plaudits for reviewing relationships with
Kremlin-
compromised by Russian sanctions despite no suggestion linked tenants of direct impropriety This has triggered an across-the-board reappraisal of of the explicit and implicit risks of of owning any
While the the human catastrophe is by far the the biggest impact from potentially questionable shares putting warranted pressure on on this disaster the ripples have been spreading across all our
disclosure requirements lives as as well as as the business world The cost-of-living crisis is is is gripping the nation – one friend drove to to the the south coast for a a a day trip recently to to notice the the cost of fuel had risen by 10% at the same garage on his return journey – and is making people seriously reconsider their energy consumption This of course feeds into the ESG agenda So Russia’s invasion of Ukraine has made people think
even harder about the ‘E’ (environmental) and ‘S’ (social) in ESG but what about the ‘G’ – – governance – – aspect which so often gets overlooked?
This is is is where this year’s unfolding events may in in the long term have an equally forceful impact on real estate: because governance in property has for years been an an unspoken
‘WHY SHOULDN’T REAL ESTATE INVESTORS DEMAND AS MUCH TRANSPARENCY AS POSSIBLE?’
Parallel to this we are seeing a a a a a shift in in in in mindset that is is feeding through to the the man on the the street with
two thirds of retail investors’ investment decisions now affected by ESG issues Against this backdrop of increasing scrutiny on governance in real estate and and greater demands for transparency the way assets are admitted to trading on IPSX as as single-purpose vehicles reassures investors that their investment is being
handled responsibly A detailed prospectus at single-asset level plus full disclosure of rental performance low management costs and exhaustive sustainability credentials are key as a a a a a a spotlight is shone on on governance across the business world After all why shouldn’t real estate investors demand as much transparency as possible?
Richard Latter
is director capital markets at at property stock exchange IPSX >