ESG and Sustainable Investment: Gearing Toward Investor's Top Pick

How amazing would it be if the company we select to invest in could deliver sustainable returns and long-term growth? That will be a dream business, one in which investors believe in and are ready to invest, bringing business opportunities and competitiveness while remaining steadfast despite volatile market conditions.

So, what kind of company is ready to grow sustainably?

The ESG principle is used as a criterion to choose companies that are committed to long-term sustainability. ESG is an indicator to determine if a company conducts business with positive environmental, social, and governance consequences. The study indicated that companies with concrete ESG portfolios have a reduced risk of company operation than conventional companies. This is owing to a lack of concern about corruption, litigation, and complaints from different sectors. Significantly, the cost of capital is reduced, making ESG funding sources more accessible. It is inextricably linked to the company's financial performance. If it is executed well, stakeholders will realize its value. And it is the cornerstone of the company's future growth.

ESG and its Role in Capital Markets

As leading capital markets shift their focus on the ESG approach, indexes have been developed to screen for companies that operate on a sustainability basis. Among these is the internationally renowned Dow Jones Sustainability Index (DJSI), which compiles equities of companies worldwide that demonstrate outstanding sustainability performance. The indexes are comprised of DJSI World, which focuses on over 2,500 large firms worldwide, and DJSI Emerging Markets (EM), which selects companies from emerging market economies. Regarding returns, the DJSI World Index has a one-year historical performance of 27.08 percent, while the DJSI Emerging Index has a performance of 24.36 percent (as of November 5, 2021). With satisfactory performance and lower operating risks from volatility than conventional enterprises, it is not surprising that investors put a premium on sustainable investment, particularly institutional investors that select stocks based on the company's ESG performance.

Young investors also give greater attention to ESG-compliant companies than to conventional ones. According to a survey conducted by MSCI ESG Research in March 2020, 95 percent of Millennials (those born between 1980 and 2000) were interested in sustainable investing. With nearly $30 trillion in assets under management, almost 90 percent of high-net-worth investors are unwilling to invest in a company that does not operate following ESG principles. More than half of these investors will not invest in a company that does not follow ESG principles.

SCGC – ESG is Key Here

As previously said, ESG is a business practice that is healthy for the planet and meets investment needs. As a result, the management vision of SCG Chemicals Public Company Limited or SCGC is to create a Chemicals Business for Sustainability by driving the company based on ESG, including environmental responsibility, social stewardship, and adherence to corporate governance values.

And it is with this perspective, SCGC operates in compliance with ESG standards.

Environmental. Not only to safeguard the environment but also to develop innovations for the environment based on circular economy concepts. SCGC aims to maximize resource efficiency while lowering waste and greenhouse gas emissions in the production process. An outstanding example is CG GREEN POLYMER™, an environmentally friendly plastic innovation series which incorporates technologies to reduce the use of plastic resins in manufacturing (Reduce), design materials to be easily recyclable while maintaining full properties (Recycle), reintroduce recyclable plastics to produce high-quality PCR (Recycle), and utilize renewable resources such as bioplastics (Renewable).

Social. SCGC conforms to social responsibility by treating all stakeholders equally, whether they are employees or business partners. We prioritize safety for our customers and partners, and SCGC strives to create products and services that suit customers' needs. When it comes to community affairs, SCGC ensures a good quality of life for the people in the areas where we operate.

Governance. With a dedication to conducting business fairly, we clearly outline corporate governance policies and communicate them to the organization's employees so that they can acknowledge and implement them. Operations are efficiently monitored while policies are examined and amended to meet international standards.

As a result of its commitment to ESG-based operations and its business potential, SCGC has maintained consistent growth and become a top-profitable core business of SCG, gearing toward becoming a regional leader in the chemical industry with a strong stance and sustainable return potential.