SINGAPORE (July 30): Market experts say that using environmental, social and governance (ESG) principles to make investment decisions is particularly sensible in this age. James Gifford, head of impact investing at UBS Global Wealth Management’s chief investment office, says there are some powerful secular trends that are driving the business case for sustainability. “Like smartphone penetration — that has meant there is this unprecedented transparency in supply chains. If you look at the proportion of, say, garment workers in Asia with smartphones, it’s probably the great majority now even in countries such as Bangladesh.

“What that means is there is nowhere for unethical companies to hide. They will get discovered by somebody at some point. The risk of being an unethical or unsustainable company has dramatically increased in recent years,” he says.

For example, the US Federal Reserve has fined several banks billions of dollars in cases related to the financial crisis of 2008. Some banks had misrepresented the creditworthiness of mortgage derivatives, while others had deficiencies in loan servicing and foreclosure processing.

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