Israel Witnessing The ‘Beginning Of Responsible Investment Taking Off
Dailycsr.com – 17 October 2019 – All over the world, there is a drive to infuse “integration of environmental, social and governance (ESG) factors” into investments. The value of “responsible investing market” is nearly “$23 trillion”, which JP Morgan Chase claims equals to almost 50% of “assets managed in Europe” and over “a third in the U.S”.
SRI, meaning “socially responsible investment”, or ESG has grabbed the attention of nearly all the global markets. Similarly Israel is also no difference, while the country made a place for its “creativity, innovation and entrepreneurship” and attracted “multinational companies”. Over three hundred global corporate organisations have their R7D sites In Israel. Among these corporate giants are “Google, Apple, Microsoft, Intel, Ford, GM, Cisco, eBay, Applied Materials and Texas Instruments”.
Morover, Israeli companies too have adapted “sustainability and corporate social responsibility”. The “2018 report” by “Maala Business for Social Responsibility” shows that the country saw “significant progress in leadership within the business sector, regulation ensuring high standards of transparency, and a growing diversity of assessment tools for socially responsible investing.”
Sustainalytics is a “research and ratings agency”, whereby its Executive Director for Sustainable Finance Solutions, Heather Lang noted Israel’s leading initiative in “desalination, solar energy and clean tech among others” and said:
“I believe there is a strong opportunity to attract ESG investors to Israeli companies, especially given the high degree of sustainability innovation coming from Israel”.
Furthermore, Lang added:
“The higher the exposure on a given ESG issue, the stronger the degree of management anticipated. Investors are also looking for disclosure on quantitative targets and metrics, in addition to looking out for any red flags, such as involvement in controversies, which may pose material risks to companies and their shareholders.”
Although, the Responsible Investor’s Managing Editor, Hugh Wheelan is of the opinion:
“There is a huge dearth of information that companies should be reporting on. For some issues, there are regulatory requirements, but most disclosure of ESG information is relatively voluntary.”
Wheelan also said:
“If companies are open to investors’ request for sustainability information, there is an increasing segment of the investor market interested in looking at those companies as investable opportunities”.
In Israel, the regulatory bodies have actively encouraging “responsible investment” for over the last fifteen years. As Amy Brown writes:
“In 2001, a new regulatory initiative required all listed companies to report on community investment activity. In 2011, the Ministry of Environmental Protection introduced an extended disclosure regulation on environmental management. In 2017, Israeli regulators required all pension funds and other institutional investors to disclose whether they use ESG criteria in investment decision-making. And early last year, the Israeli Securities Authority announced it is preparing a voluntary questionnaire regarding ESG indicators to be filed with listed companies’ annual financial reports”.
According to Lang’s observation, sustainable finance goes well with Israel, as she explained:
“I think there’s a clear opportunity for Israeli companies to issue use of proceeds bonds and loans in alignment with globally recognized standards such as the Green Bond Principles. This would support them in attracting the attention of international investors”.
When it comes to the risks related transparency, Lang believes:
“Israeli companies to do a better job of telling their sustainability story. It’s a fairly insular market, and some companies don’t even publish their sustainability reporting in English.”
However, she also cautioned:
“In addition to telling their success stories, Israeli companies need to be more transparent about the risks they face in the region to alleviate the concerns of some responsible investors, or at least provide some context.”
The Corporate Social Responsibility’s Head at Bank Hapoalim, Sharon Alaluf said:
“We believe that investors realize today that a company's ESG performance has a strong link to its business performance and financial results for the long term. Therefore, we expect this interest in ESG issues to continue and grow”.
“Unfortunately, not many companies in Israel publish CSR reports, and the bank serves as a market leader in this aspect”.
Nevertheless, the Bank Hapoalim gives importance to such information and provides answers to “very detailed questionnaires” along with generating other documents that shows the bank’s CSR performance. Even though, Alaluf is aware that Israel is “definitely behind” compared to Europe in the field of “SRI and ESG investments”, but she added:
“We believe that more interest in and demand from international investors, clients, and other stakeholders in Israeli companies will promote the field and bring it closer to global trends.”
Likewise, Lang also thinks:
“My sense is that the Israeli market is lagging behind other countries in the ESG space. That said, thanks to the important work of organizations like Maala and the leadership of a few early movers, we’re likely to see some momentum build up over the coming years.”
Similarly Wheelan also agrees:
“It’s still relatively early days in Israel in the shift in ESG perspective to a more strategic, business-led movement, but some of the early signs are there. Israeli companies are well aware of what CSR means to them as organizations. What you are seeing in Israel on the ground is the beginning of responsible investment taking off, which is exciting.”
References:
3blmedia.com
SRI, meaning “socially responsible investment”, or ESG has grabbed the attention of nearly all the global markets. Similarly Israel is also no difference, while the country made a place for its “creativity, innovation and entrepreneurship” and attracted “multinational companies”. Over three hundred global corporate organisations have their R7D sites In Israel. Among these corporate giants are “Google, Apple, Microsoft, Intel, Ford, GM, Cisco, eBay, Applied Materials and Texas Instruments”.
Morover, Israeli companies too have adapted “sustainability and corporate social responsibility”. The “2018 report” by “Maala Business for Social Responsibility” shows that the country saw “significant progress in leadership within the business sector, regulation ensuring high standards of transparency, and a growing diversity of assessment tools for socially responsible investing.”
Sustainalytics is a “research and ratings agency”, whereby its Executive Director for Sustainable Finance Solutions, Heather Lang noted Israel’s leading initiative in “desalination, solar energy and clean tech among others” and said:
“I believe there is a strong opportunity to attract ESG investors to Israeli companies, especially given the high degree of sustainability innovation coming from Israel”.
Furthermore, Lang added:
“The higher the exposure on a given ESG issue, the stronger the degree of management anticipated. Investors are also looking for disclosure on quantitative targets and metrics, in addition to looking out for any red flags, such as involvement in controversies, which may pose material risks to companies and their shareholders.”
Although, the Responsible Investor’s Managing Editor, Hugh Wheelan is of the opinion:
“There is a huge dearth of information that companies should be reporting on. For some issues, there are regulatory requirements, but most disclosure of ESG information is relatively voluntary.”
Wheelan also said:
“If companies are open to investors’ request for sustainability information, there is an increasing segment of the investor market interested in looking at those companies as investable opportunities”.
In Israel, the regulatory bodies have actively encouraging “responsible investment” for over the last fifteen years. As Amy Brown writes:
“In 2001, a new regulatory initiative required all listed companies to report on community investment activity. In 2011, the Ministry of Environmental Protection introduced an extended disclosure regulation on environmental management. In 2017, Israeli regulators required all pension funds and other institutional investors to disclose whether they use ESG criteria in investment decision-making. And early last year, the Israeli Securities Authority announced it is preparing a voluntary questionnaire regarding ESG indicators to be filed with listed companies’ annual financial reports”.
According to Lang’s observation, sustainable finance goes well with Israel, as she explained:
“I think there’s a clear opportunity for Israeli companies to issue use of proceeds bonds and loans in alignment with globally recognized standards such as the Green Bond Principles. This would support them in attracting the attention of international investors”.
When it comes to the risks related transparency, Lang believes:
“Israeli companies to do a better job of telling their sustainability story. It’s a fairly insular market, and some companies don’t even publish their sustainability reporting in English.”
However, she also cautioned:
“In addition to telling their success stories, Israeli companies need to be more transparent about the risks they face in the region to alleviate the concerns of some responsible investors, or at least provide some context.”
The Corporate Social Responsibility’s Head at Bank Hapoalim, Sharon Alaluf said:
“We believe that investors realize today that a company's ESG performance has a strong link to its business performance and financial results for the long term. Therefore, we expect this interest in ESG issues to continue and grow”.
“Unfortunately, not many companies in Israel publish CSR reports, and the bank serves as a market leader in this aspect”.
Nevertheless, the Bank Hapoalim gives importance to such information and provides answers to “very detailed questionnaires” along with generating other documents that shows the bank’s CSR performance. Even though, Alaluf is aware that Israel is “definitely behind” compared to Europe in the field of “SRI and ESG investments”, but she added:
“We believe that more interest in and demand from international investors, clients, and other stakeholders in Israeli companies will promote the field and bring it closer to global trends.”
Likewise, Lang also thinks:
“My sense is that the Israeli market is lagging behind other countries in the ESG space. That said, thanks to the important work of organizations like Maala and the leadership of a few early movers, we’re likely to see some momentum build up over the coming years.”
Similarly Wheelan also agrees:
“It’s still relatively early days in Israel in the shift in ESG perspective to a more strategic, business-led movement, but some of the early signs are there. Israeli companies are well aware of what CSR means to them as organizations. What you are seeing in Israel on the ground is the beginning of responsible investment taking off, which is exciting.”
References:
3blmedia.com
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