South Africa had not seized the opportunity to make structural reforms and changes.While the country had benefited in some ways from the Covid-19 crisis, with oil prices falling at the same time that precious metal prices were soaring, the increasing level of tax being used to service interest on debt raised questions of sustainability. South Africa can use the Covid-19 crisis to implement reforms and get the country back to a strong growth trajectory. In recent years, Brazil managed to implement reforms, address corruption and reduce the country’s debt levels, which could point the way for South Africa.
ESG investments are currently estimated to total around $30trn globally – or one in every three investment dollars – as more than 86% of S&P 500 companies adopt some form of ESG principles. While the importance of ESG investing is not yet a major feature of the South African landscape, the number of sustainability-focused index funds and their assets have doubled over the past three years. One of the myths of sustainable investing is that investors have to make a trade-off between ESG and performance. The numbers show that’s simply not true. During the second quarter, 56% of sustainable funds ranked in the top half of their Morningstar category, and year-to-date, that number jumps to 72%.