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Saturday, 20.04.2024, 15:25
Sustainable Business Operations are Important to 86% of Latvians
The presentation of a public survey and panel of experts
took place at Citadele Bank, with the goal of determining in what sort of
businesses the Latvian public wishes to invest their money whether and how the
criteria of the younger and older generations differ, and whether the fact that
a business operates responsibly long-term affects the public.
The public
survey confirms that the most important criteria for the Latvian public when
evaluating whether to invest their money in a company are financial results (as
stated by 81% of those surveyed) and the reputation of the business (76% of
those surveyed). This is followed by the company’s attitude towards its
employees (43%), the reputation of the company’s management and owners (42%),
and the company’s popularity and recognisability (36%). Meanwhile, just 14% of
respondents indicated that the company’s environmental policy is important to
them, and 8% mentioned the company’s donation, sponsorship and support
activities.
“The
results of the survey show that 86% of the Latvian public find it important
that the business they invest in is sustainable. Sustainability includes
environmental, social and corporate governance factors. But we see in the
public survey that a company’s impact on the environment is more important to
younger people. 24% of those aged between 18 and 29 acknowledged this as an
important factor. Meanwhile, other age groups saw 11-14% of respondents marking
this as important,” explains CBL Asset Management Chairman of
the Board Kārlis Purgailis.
He
emphasizes that, “the times when people only took financial results into
account are long past. Worldwide, investors are giving more weight to a
company’s attitude towards the environment and its employees, reputation,
governance and other principles of responsible, sustainable operation alongside
financial information. The basis for this is both social and financial. First
of all, we see what happens to our planet, living conditions, animal diversity
and natural resources when businesses don’t act responsibly. Secondly, a
company’s sustainable operations have a direct impact on its financial results
and stability. For example, if a business does not sufficiently take into
account and thus doesn’t try to reduce the negative impact of its operations on
the local environment, the risk of a natural disaster and public protest
increases, and sooner or later this will affect their financial results and the
value of the company’s shares,” adds Purgailis.
Would invest in IT businesses, tourism and forestry
Data from the survey
suggests that, among various industries, the Latvian public would most like to
invest their money in information technology businesses (25%); hospitality,
tourism and catering businesses (10%); as well as in forestry (10%). This is
followed by manufacturing (9%) and agriculture (9%). The public is
comparatively less likely to choose to invest in industries such as financial
services (8%), electric energy generation (8%), leisure and arts (7%),
construction (5%), telecommunications (4%), trade (3%) and transport (3%).
All inhabitants of Latvia are investors with their pension savings
“The government
puts 6% of every Latvian inhabitant’s pre-tax wages in a level 2 pension fund.
This means that every employed person is an investor, because the funds they
accumulate are invested by pension fund managers in the shares of various
businesses and in treasury bonds.
The money
saved in various pension funds worldwide is one of the largest assets in the
global economy. In the last ten years, pension capital saved in the world’s 22
most-developed countries has doubled, growing from around 20 trillion Euro to
40 trillion Euro.
Pension
capital saved in Latvia over the past ten years has increased almost six-fold,
growing from 660 million at the end of 2008 to more than 4 billion now. This
means that pension savings are playing an increasing role among investments,
significantly impacting how global business develops and what impact it has on
the environment and society. That’s why I invite everyone to assess whether
their chosen pension manager and pension plan invests in sustainable
businesses,” encourages CBL Asset Management Chairman of the Board Kārlis Purgailis.
To promote sustainable investment practices and to ensure pension
savings are invested in the most responsible businesses possible in the long
term, the CBL Asset Management investment management company has joined the
UN-supported declaration on Principles for Responsible Investment (PRI),
showing that, going forward, CBL Asset Management will give additional weight
to environmental, social and governance factors as well as financial
information when deciding where to invest. In parallel, CBL Asset Management
has created the CBL Sustainable Opportunity Investment Plan, Latvia’s first
pension plan in which pension savings are invested in businesses which are
leaders of sustainability in their industries. Thus Latvians have the
opportunity to entrust their pension savings to a manager who invests
responsibly.
The
sociological survey was undertaken by Citadele Bank’s subsidiary CBL
Asset Management in collaboration with market research company Norstat
Latvija. The survey was done in May this year, surveying 1,005 members of
the public aged between 18 and 74 online.
Citadele
Bank’s subsidiary, IPAS
CBL Asset Management, is one of the leading and most experienced financial
asset management companies in the Baltics. It has been managing investment
portfolios since 2002. Meanwhile, in 2003, it became one of the first in Latvia
to manage level 2 pension savings. CBL Asset Management has the largest team of
managers in Latvia, which regularly analyses the financial and capital markets
and macroeconomic trends, investing pension savings in both large international
and local Latvian businesses, as well as in the bonds of various countries.