Anshu Bahanda: Welcome to another episode of Wellness Curated. This is your host, Anshu Bahanda, and as you know, the aim of this podcast is to help you lead a healthier, happier, more hopeful life. But we’re not just here to give you ideas, but also to spark a journey—a journey towards a more fulfilling life. And this season, we’re going to dial into the rhythm of the planet with a special emphasis on environmental well being. Today our subject is green investing, and green investing is where you’re going to marry your financial aspirations with your commitment to the environment and to social progress. We are thrilled to have Seynabou Ba on board. She’s the visionary behind ESG Africa. Currently, she’s the group ESG director of Azura Power Holdings. She has 24 years of experience in the world of sustainability and the world of green investing, and she has also worked in the past with IFC in Sub-Saharan Africa as their ESG manager. Welcome to the chat, Seynabou, and thank you so much for making the time to talk to us.
Seynabou Ba: Thank you very much, Anshu, and I’m very thrilled to be on your show. So thank you very much for inviting me.
AB: You’re welcome, and we’re thrilled to have you here today. So Seynabou, as you are probably aware, more than anyone else, that at the moment green investing is very topical and it’s very fashionable. But will you explain to us what the difference is between green investing and traditional investing?
SB: So thank you for giving me this opportunity, and really, I just want to maybe step back and tell you a little bit more about what I do so that the audience understands what I do and then link it to green investment. First of all, I’m very lucky to be one of those doing work on something that they’re very passionate about. I am absolutely passionate about this field. So what I do is really support the private sector in designing their sustainability journey.
AB: What does that mean?
SB: That means risk management in everything that’s environment-related, social impact, as well as governance. So I’m going to just briefly talk about each one of them. Environmental really means looking at the impact a business can have on the environment and its surroundings, whether it’s pollution-related or a spill, for instance, of a chemical in the environment, and then managing those aspects to ensure that it doesn’t happen on the social side. Imagine that if you are about to start a business activity and you need land, for instance, and you have to acquire land, how do you do that in a responsible way that ensures that the person you’re buying land from or the business you’re buying land from is not left worse off than they were before? And you also look at the impact that business activity can have on the communities around it.
On the governance side, you’re basically looking at the company’s decision-making process. How does a company make decisions? You’re really looking at the company’s decision-making process in terms of transparency, in terms of their ethical behaviour, and in terms of also looking at the best interests of not only their shareholders, who have invested for profit to obtain some profit, of course, but also the stakeholders. And by stakeholders, I mean the employees. It could be the government; it could be any type of stakeholder that you might think of. So this is what you’ve probably heard of as being ESG. So you probably heard the term ESG, responsible investing, and everything else. So to come back to your question now, which is really the difference between green investing and traditional investing? It is really—investing, I would say, number one, in companies that are responsible, that look at aspects, and that are committed to environmental, social, and governance—to ESG. And second of all, companies that are also very conscious of what they’re doing in terms of business activity. So they’re investing in technologies that are using less fossil fuels and that are safeguarding our water, whether it’s less impact on climate change, air emissions, or just using any of our natural resources, such as fossil fuels. An example of that could be companies that are involved in wind technology. So in terms of generating electricity, using solar, wind power, and hydropower But again, each one of them also comes with some consequences that we can talk about later as well.
AB: Thank you for that. So for someone who’s keen to get involved with the green investment movement, what would you say are the things that they should look for? What would you say are the guiding stars, so to speak?
SB: Okay, there are many. But first of all, what I would say is to really, and I think I mentioned that already, the commitment of the company, not only in terms of what they say on their website, of course, because everybody can be self-promoting, but really what they’re doing, making sure that you believe in the sustainability of their activity, what transition plans that they have, how are they looking at climate change, how are they looking at social impact, and how are they treating their employees in terms of being wary of the health and safety of their employees? So there are a lot of different indicators that will tell you about the company’s commitment. So really looking at those strong commitments towards environmental, social, and governance and how they perform against those indicators, looking at their commitments to the UN Sustainable Development Goals. And again, how are they performing against those looking at their commitment to climate change, the Paris Agreement, reducing the impacts of climate change? So it’s not only about the commitment, but really taking time to research what they’re doing. So that would be the guiding principle for me. First of all, it requires a lot of research, not only sufficient research, but also going to professionals. There are professionals out there looking at green investment and impact investment. That was the word I was looking for: impact investment, responsible investment.
AB: So, you know, Seynabou, I was in Denmark and Sweden recently, and these countries are supposed to be leading the world in the areas of green investing. That’s what they say. What I realised was that it’s a whole ecosystem; it’s a whole lifestyle. It comes down to every single individual; it comes down to political will and social agreement; it’s not just something that the companies do or the government does. It’s a whole ecosystem, don’t you think so?
SB: You’re so right, Anshu. Actually, it’s just a way of living. It’s a way of being.
AB: Yes, it’s a way of being. Absolutely.
SB: And if you’re really true to yourself, it will automatically and invariably just show in every aspect of one’s life, from your choices even at the grocery store to what you choose to eat in terms of clean living, it shows in so many different ways, right? What you choose to eat; when you go grocery shopping—do you make sure that you take a bag that’s a recyclable bag, whether it’s made of fabric or natural things that are recyclable, natural materials that are recyclable instead of using plastic; the kind of cars you use—there’s a budget restriction, of course. But even just thinking about going green in different aspects of your life from your home—making sure when you’re using water, when you’re taking a shower—that you don’t let the tap run all the time and you’re conscious of it—of switching lights off, not letting the AC on. So there’s so many things that each individual can contribute and not just say, Well, it’s just me, so it doesn’t make a difference if I don’t do it. But saying I can make a change and starting in your own home and then requiring that from when you’re investing in the companies you invest in
So if you’re putting your money, whether you’re investing in stocks, whether you’re investing in a mutual fund, or a pension fund, ask yourself, Where’s my money going? Which companies are you going to be financing? What are those companies doing? And really following your own money, and so that’s why I totally agree with you that it’s really a way of being.
AB: So there are a lot of pros to green investing, but there are also the likes of greenwashing. There’s a very complicated world out there when it comes to green investing. So talk us through some of the pros and cons of green investing.
SB: The pros are obvious in terms of if you really are looking for a sustainable future and what does a sustainable future mean? The things that we’re enjoying today, the luxuries that we have today, of just being able to be out there, being able to enjoy what nature offers to us, whether it’s through the food we eat, through the climate we have, through the vista, the animals that we can see. And even being able to offer that to our children, our grandchildren, our great grandchildren. So the future for them to have those same opportunities. And therefore, when you’re looking at green investment, to me, it is all the companies and all the activities that are helping us ensure that the future generation can benefit from all the things that nature has to offer today. So when you’re investing in this company, you’re making a statement, first of all, and you’re contributing to all the things that we’re fighting right now, we’re fighting climate change, we’re making sure we still have polar bears, they exist, we’ll still have all these wonderful animals and biodiversity. So not only animal biodiversity, whether it be marine biodiversity, terrestrial biodiversity, all of these things still exist in the future, and that we exist in the future, by the way. So our own survival. So in terms of the benefit, not only do you have that aspect, but also you can make money. So let’s not think that green investing is hugging trees. You can make money in green investing.
Now, the cons on it for me is that on the financial return, for those maybe very interested in financial returns, maybe the returns might be more on the long term, even though there’s been data out there that proves that companies with strong ESG performance actually outperform those with weak ESG performance. And we talked about ESG before, but nevertheless, the data on green investing, so the historical data is not as long as traditional investing because it’s something that hasn’t been there for that long. So we have hundreds of years of traditional investing data, but not necessarily for green investing.
AB: Okay, but here I want to ask you something, which is again a big topic of conversation these days. So let’s talk about, say, electric cars. So let’s talk about investments in a healthier, electric car company, right, it’s meant to be the more sustainable choice. But there is a huge school of thought which says in making that car, the carbon footprint is greater than in making a traditional car. That’s why green investing gets complicated. Can you throw some light on that?
SB: Yes, green investing is indeed complicated, and I think earlier you also mentioned greenwashing. So I do want to quickly maybe touch upon greenwashing, and then we’ll move to the complication example.
AB: So explain greenwashing as well to our listeners.
SB: So greenwashing, the simplest way I can put it, is really the fake news in ESG commitment. So companies actually like to say a lot about what they do in the environment, social, governance, and green investing, but when you look deep down, they really spend more time talking about it than what they’re doing on the ground. So it’s really a way of dressing themselves up to look good because, actually, consumers and investors are looking for sustainable investment. They want to look at companies that are actually very conscious and committed to looking at the long-term sustainability of the company. You don’t want a company that hasn’t considered basic things, things that are going to make them sustainable, whether it’s water resources: where’s my water coming from, their community relationships in terms of ensuring that they have their licence to operate, or their social licence to operate that is involved in community development. Really making sure that all the ducks are in the row, if I could say, in terms of ensuring their viability in the long term. So any investor would want to look at all these aspects. So people that are pretending to do it but are not doing it—sorry, companies that are pretending to do it but are not doing it—are the ones that we are calling greenwashing. So if we come back to the example of electric cars, beyond what you just said in terms of some of the reasons, in terms of making the car, I think looking at the electricity, where is that electricity that you have to plug the car? So where is that source of electricity coming from? So is it electricity coming from solar panels, which is more green? Which source it is coming from is also equally important. If it’s coming from fossil fuels, then you can argue that it’s maybe less green even though you’re using an electric car. But if where you’re plugging it is coming from a source that is not green, then that could be an issue. So I think it’s really looking at the whole supply chain. It’s not just saying, Oh, I’m investing in an electric car, or oh, this is wind power. So, yes, great. Because even when looking at wind power, it also has a lot of effect on birds. So this is why I’m saying that it’s very complicated. So it’s really about looking at where there is less negative impact? It’s not a holy grail. So it’s really about… How would I say this? It’s really about finding equilibrium in terms of what has less of a negative impact.
AB: So on that note, for people who are getting involved with investments, are there certifications or licences that they should look for that you would trust?
SB: Yes. I mean, there are some different certifications that are always worth looking at. And also the renewal of those certifications, which I think is really important. So you can get it one time, but then what has the company done to maintain that certification? How long have they been certified? And how many different bodies are certifying them? I like to always say that it’s really good to triangulate information. So we’re not just looking at one source; we’re looking at different sources and looking at a company over time and not really getting too hyped up about the marketing of that company. You can look at fair trade certifications. If you look at environmental health and safety performance, you can also look at ISO certifications. And there’s always pros and cons to any certification; you will find people who believe in it and others who don’t. But yes, there’s some certification that you can look at for approval—green seals of approval. But again, that does not replace any research, and I really recommend people do their research and triangulate information as well.
AB: Lovely and Seynabou, you know, recently there’s been all these fires in different parts of the world, and now the new term that people are using is that it’s moved from global warming to global boiling. So in this battle against climate change, we’ve briefly touched on it. But do you think green investing can really help us in that battle?
SB: Wow, it’s a very good question, Anshu. Green investing will definitely help in terms of: the more we have a critical mass of companies realising that they can’t get capital unless they are serious about ESG commitments, about protecting the environment, about looking at climate change, and about social impact. That’s certainly going to contribute to our fight against climate change, to our fight for a better world, and to leaving a better world for the next generation. However, it’s not only about green investing; it’s also about our own individual, like we’ve mentioned, way of living. It’s about the sacrifices that we, as people, are willing to make. It’s also about the role of the government in participating in this, in enforcing some of the environmental policies, laws, and regulations that are in place in terms of the government also having some incentives, putting incentives out there for green investing as well. That, to me, is what’s going to help. But it’s not only left to one actor; it’s all of us together, getting there. And we each have a role to play in that.
AB: So what do you think governments can do, and what do you think the big corporations can do and the big banks can do to help with green investing?
SB: What more can they do?
AB: Yeah, what more can they do?
SB: So in terms of the government, it’s so much easier. It’s so much easier for the government to contribute, I think, in the sense that they can just ban certain things. Let’s say something as simple as plastic. If it’s not available in the supermarket, guess what? We’re going to adapt. You take it away; we’re resilient; we’ll find another way of doing it. So I think there really are some short, low-hanging fruits that can make a difference in terms of waste management, in terms of reusing biogas, and in terms of waste energy. So there’s so many different things that the government can put in place—sorry, so many incentives—to encourage green investing and encourage a greener way of living. If, for instance, the government decided, you know what, and I think it’s been done in the UK and in other countries in terms of cars, how many cars can be on the road at the same time, having even and odd plates, number plates, depending on the day. Having a day, maybe on Sundays, just to say, you know what? Sunday morning on this road, no cars; everybody uses their bike. I mean, there are so many different things that the government could put in place to encourage people to contribute to combating climate change. That’s what I would say.
And in terms of the private sector, now I do what I do because I actually believe that the private sector can have the biggest impact in our fight against climate change and having a sustainable future because what businesses do, the scale of it is so big. So when a business decides to source in a sustainable manner, when a business decides to protect its employees in terms of their health and safety, when a business decides to be responsible, the impacts are huge.
AB: Thank you for that. Where do you think green investment is headed? What do you think are going to be the interesting things that I mean, if I gave you a crystal ball and said, Seynabou, tell me, where are we going with this? What should people be looking at in terms of investments? What would you say?
SB: Well, in terms of where we’re going, I think it’s just going to be a must and a requirement. I mean, if you look at today already, I’m going to talk about the Equator principal bank. What are Equator principal banks? They are just banks who have made a voluntary commitment from a certain threshold of investing to require that their client have ESG standards. So are committed to ESG, to have good ESG policies, application of these policies and really show their commitment in what they do. So considering ESG in everything that they do now, you have right now, I think about over 120 banks that are signatory to the Equator principle, which means that if you do not have, if you don’t look at the ESG aspect, they will not invest in your company or at least if you’re not committed towards it. So it’s not like from the front, you have to be high in ESG, but at least you have a roadmap to improving your ESG standard and meeting certain commitments. Typically IFC performance standard, and IFC performance standard are considered the gold standard in sustainability in terms of private sector investment. So I think this is where it’s going in terms of just more and more pressure, not only from the consumers, from banks and from the government, for companies to demonstrate responsible investing and I think people are catching on more and more to the fact that green investing can yield profits. So you can do good, you can do social entrepreneurship, you can do green investing, you can do impact investing and you can make money. So I think that’s where it’s going, and I hope that there’ll be more data to support it, and this will actually become the only way of doing things.
AB: Thank you for that. Also, like you were saying earlier, earlier they used to say that if you chose a green company, you won’t necessarily make money. That’s not the case anymore, right?
SB: As I’ve mentioned earlier, there is data supporting the claim that companies with strong ESG performance outperform companies with weak ESG performance.
AB: Okay, give me an example.
SB: Well, it’s hard for me to give you an example because I would need to mention some companies. But this is data from Harvard Business School. And so this is, I would say, credible data that looked at companies over from the 90s all the way for 10-15 years, looking at those with strong ESG performance versus those with weak ESG performance and showing that on the stock market, the stock of those with strong ESG performance was actually outperforming those with weak ESG performance. And it makes sense. Think about it. If you’re not looking at the sustainability of your business, if you’re not managing your environmental or social risk, you might not have your social licence to operate. You might not have your environmental licence. If you don’t have good governance practices, that means your decision-making, transparency, and ethical aspects could be compromised. So obviously, these types of companies can’t be long-lived. Sooner or later, these bad practices are going to catch up. So if you’re looking at long-term investing companies that are incorporating environmental, social, and governance aspects into their business strategy, they’re just better companies because they’re looking at risk management from all these different aspects. So for me, Anshu, I think I’m losing the plot a little bit. What was the question? Sorry, we’re going to have to go back. What was the question?
AB: I was just saying, Give me an example of a company that has been very good. That is what you would consider a green investment company, which has also been very lucrative.
SB: Well, I think Tesla is one that comes to mind. My son swears by Tesla, and I don’t want to really say this just because. Because interestingly, my son just turned 18, but even before he was 18, he was looking at me investing in my investment portfolio, and the first thing he asked me was, Why aren’t you investing in Tesla? This is green. This is the future. It has a really strong impact on me to hear him say that, because you realise that this young generation is so conscious of it that they’re really thinking about the future. And it also made me think about how this young generation can impact a lot, even current companies, because, think about it, they all have people behind them. We talk about these companies like some entity, but who is behind the companies? They’re just human beings, just like you and I.
AB: Absolutely right. Absolutely.
SB: They’re parents who have children who can also be influenced by their children. Their children might hold them accountable. The more I think about these companies, think about the future, and think about their own children, the owners of these companies think about their own children, and maybe even be influenced by their own children and their families around them. I think the more commitment we’re going to have around ESG, the more creative and innovative people are going to be because green investment requires that innovation. So when you think that you can actually do things using technology in a more efficient way, you can do it using less energy and less water.
AB: Absolutely. Talk to me about technology. Talk to me about technology and green investing because it’s so important.
SB: It’s essential. Technology is essential. And I really believe in incorporating innovation. If you look at it, even on the energy production side, even when using fossil fuel, people are looking at carbon capture technology; they’re looking at green hydrogen. I mean, there are so many different aspects. So let’s watch this space. That’s what I would say: Let’s watch this space.
AB: Fabulous. Fabulous. No, absolutely. But in terms of asset allocation, where do you think… Do you think that they should have 50% of their assets in green? Should they have 100% of their assets in green? Because when I talk to my 25-year-old daughter, she’s like, 100% should be green. And then I talk to some more traditional investors, and they’re like, We’re doing 5%; we’re dipping our toes in to see. So do you have a view on this—a more balanced view than both sides—that I can try?
SB: My own personal view is that 100% of it should go to companies that are committed to ESG. I would not invest in any company that doesn’t show true commitment to ESG, because that is, for me, the only way a company can be resilient and survive all the different shocks and waves. They’re thinking about this. They’re thinking about how they’re going to be viable in the future. They’re thinking about how they’re going to be sustainable. So I would not invest in any company that doesn’t look into that right now. In terms of green investment, I think your daughter’s talking about the likes of Tesla, the likes of the wind farm, the likes of solar, and the likes of companies that are in business. Activities that are really focused on reducing our use of the limited natural resources that we have, I think, depend on different appetites and also depend on individual goals in terms of investing. Some of these green investments might require much more capital investment and might also be more long-term in terms of really getting your returns. Others you can get short-term. So it really depends on what your investment profile is. But like in anything, I highly recommend that everybody have a diversified portfolio and also talk to an investment professional and look at how much you want to do in green investing, in impact investing, and what your own way of seeing this world and your own beliefs are. Because, in essence, at the end, ultimately, you are where you invest. People say you are what you eat, and I believe you are also where you invest. It’s a reflection of you, just like your friends are a reflection of you. Your investment is a reflection of you.
AB: Your investments are a reflection of you. Very important. You know how, when you’re buying your tickets, there’s always carbon credit at the end? So I got curious about that, and I started looking into it. But it’s a very hard area, and carbon credits are still a very grey area. It’s not as simple as it looks, and it’s not that easy to get. And the people I spoke to who are actually selling carbon credits are not necessarily able to cover their costs.
SB: It’s a little bit more of a difficult area, to be honest. Because you’re talking about offsetting. That’s what you’re really saying. It’s like, well, yes, I am using carbon, and you will actually see some airline companies. I think I’ve seen this; I wish I could just remember.
AB: British Airways does it as an example. British Airways does it.
SB: So the airlines will indicate the amount of carbon a certain flight has generated. And really, what you mean by having to offset it is really investing in a company that is actually doing some carbon sequestration, like a forest with more trees planted. Let us take a simple example: more trees planted in some land, in some forest, to protect the environment. So some companies actually have programmes in place to systematically do it. However, these offsets and these carbon credits are still quite complicated and actually quite expensive. You’ve mentioned some companies saying that they’re not making money, but even so, it’s still very expensive for a company to offset. Because when you’re looking at the amount generated and the number of trees required to be planted to offset it, it’s just so huge. So, there are more and more companies involved in it, but there can’t be enough. I would say that we need more and more companies doing it—planting trees. Just as an aside, I also work with this organisation called Justdiggit, which is out there trying to cool the earth by planting more trees. But it’s not easy. It’s not easy. I wish I could tell you a little bit more because I myself am researching that and looking at opportunities with the private sector companies that I work with in terms of how to offset it. But when I look at that, it is so huge that it doesn’t make business sense, it doesn’t make financial sense. And I think we’re still at that stage. And even though I’m seeing more and more opportunities blossoming, it’s still very expensive. So right now the idea is to reduce it, reduce your carbon footprint as much as you can. And that’s what I think the focus is on. And then when you can do some offsets.
AB: Okay, lovely. And sort of casting the net wider. Are there any sectors or industries which you would say are a gold mine for green investing? Just as a tip for our listeners.
SB: I guess renewables. Renewables are the easiest one. Also there’s the social, so impact investing, because we talk about green investing and sometimes when we talk about green investing, people only think about things that are to do with the environment. But there’s also impact investing, which are impacts on social aspects. And this can be on companies that are focusing on poverty reduction, companies that are focusing on having more access to healthcare, more access to finance, financing, more women financing. So there’s so many different ways that one can contribute. For me, I look at them equally as important. Improving people’s life, improving the environment is all part of the well being of this planet.
AB: That’s actually very good advice because a lot of the well known fund managers are now doing impact investment funds. So people, even they will do all the research. People just need to decide which fund to invest in. Which impact investment fund to invest in. So that’s very good advice. So Seynabou, at the end of every chat, we do a quick rapid fire round to summarise our chat.
SB: Just maybe one thing before we end. So before that, think about what’s really important—maybe we didn’t touch upon it—and how you look at investing. When you’re in front of your investment professional, ask questions. It’s about you having the right questions. It’s about you asking the right questions, explaining your investment goals, explaining your own values, and looking at companies that match those. Because the more we have consumers asking for that, the more the companies are also going to respond to that as well. So do not underestimate the power you have in terms of your investment choices. We are bullying Mother Nature. It’s actually like bullying because we’re taking [from her]. But let’s also not be mistaken; Mother Nature is fighting back, and the tsunamis that we’re seeing and the fires are Mother Nature’s way of saying ‘enough’ and are fighting back. So we really need to go back and find our harmony in terms of how we were before with nature, where when we took what we needed, we gave back. We did not overuse it. We were much more conscious. And I like to go back: looking at even when I think about the way I was raised, back in the day, we already had this mindset of a circular economy. I remember when we had guests and we’d go buy—whether it’s drinks, they were in bottles and not in plastic, and we would eagerly wait for the guests to go because we would take back those bottles to the store and get the money back from it because you had to have a consignment for the bottle. So you use it, and then you return it because it’s going to be reused. When we went to the market, we had this material in terms of the bag; it’s calabash that’s really made of naturally biodegradable products. We didn’t use plastic bags. Now you know I’m from Senegal. I mean, the whole environment is plastic, and cheap plastic. I mean, the trees are decorated with plastic. And you know about our oceans—our oceans are filled with plastic. And one of the things that I always say is that in the past and our ancestry were so in touch with nature and that even in many African languages, including my own, you will see that the word tree, which is a symbol of environment, is the same as the word medicine. You say Garab, which means tree, but Garab also means medicine. So for me, it’s counterintuitive for us to destroy what heals us as human beings.
AB: So I’m going to do a rapid-fire round with you to get lightning-quick wisdom from you. So if one were to tread the green investment path, what’s the one thing they shouldn’t overlook?
SB: ESG. Look at their ESG commitment. I think you start there. What is a company’s commitment to environmental, social, and governance, and are they walking the talk?
AB: Lovely. In your eyes, what’s the paramount environmental concern investments should zoom into?
SB: The use of natural resources—whether it’s water or whether it’s fossil fuels—and how efficiently they’re doing it? And what’s their use of technology to minimise the use of all these resources that we have as well as their social practises? How are they treating communities? How are they treating their own employees? So for me, those are the aspects that I would look at.
AB: Thank you. Thank you so much for that. And what I’m going away with from this podcast is that green and impact investing isn’t just an investment in profitability; it’s an investment in our survival.
SB: It is. It’s an investment in our survival that could also be profitable.
AB: Thank you for listening today. I hope you learned something new, I hope you’ve learned all about green investing, and I hope you’re going to press the like button and encourage your friends and family to subscribe to my channel. I would love to hear from you. So please send an email to Anshu@wellnesscurated.life with any topic suggestions or questions that you might have. We also have a book of affirmations, which has some really interesting affirmations that I have written. These are things that I say to myself, and a lot of people ask for them. So we printed it out. Please send an email again to Anshu@wellnesscurated.life if you would like a copy. And thank you for being here today. See you next week.