Addressing climate change through our investments

It’s imperative that South Africa makes the transition from a climate-unfriendly economy to one that prioritises the environment. Given our history and socioeconomic position, it’s equally important that this will be a just transition. By this I mean that our high carbon outputs and high levels of unemployment, poverty and inequality make it imperative that our pathway to net zero is socially just and inclusive.

As asset managers, Old Mutual does not believe that this can be achieved with disinvestment and no-buy lists. It’s about responsible investment and ensuring that we continue to get the best returns for our investors. This requires active, ongoing engagement with the management of all the businesses we invest in – both in formal forums like AGMs and informally throughout the year – to hold them to account.

It also spans all the pillars of ESG, which is a prerogative for Old Mutual. As part of our carbon-footprint reduction commitment, OMIG has pledged to decarbonise assets under its management through the Net Zero Asset Managers initiative.

It is heartening that organisations with large carbon footprints have become a lot more receptive to this conversation. It’s at the top of the agenda for them, which is encouraging for us.

It goes without saying that climate change has to remain a key business imperative, and we are committed to expanding our influence by investing in green-economy assets, especially renewable energy and low-carbon technologies. Old Mutual’s goal is to phase out coal by 2040 so that we won’t have any investments in new thermal coal-production facilities after that date.

Three transformation initiatives

Transformation is, and should be, high on the priority list for all South African companies. As asset managers, Old Mutual’s focus is on advancing transformation in this industry.

In late April 2022, we announced a R2.8 billion B-BBEE transaction, which will increase Black shareholding in Old Mutual by an estimated 4%. Once concluded, the total Black shareholding in Old Mutual will be over 30%. The deal, which is called Bula Tsela (Sesotho for ‘open the way’), follows the news that Old Mutual has maintained its Level 1 B-BBEE rating for the third year running. It also marks a major milestone in South Africa’s B-BBEE history, making Old Mutual the first insurer to offer shares to the Black South African public directly and to lower-income earners via its retail scheme.

The Old Mutual Board and Executive Committee are one of the most diverse in the country, and we have a growing number of women in senior leadership positions. I myself am proud to be one of five female leaders on our Group Executive Committee.

This year, we also entered into a share sale agreement that sees the wholly Black-women-owned investment company African Women Chartered Accountants Investment Holdings acquire 21.2% of Futuregrowth’s shares. This moves Futuregrowth closer to becoming a 50% Black-owned investment outfit.

Investing to safeguard clients’ financial future

The theme for this year's Old Mutual Corporate Investment Roadshow was ‘Whatever Tomorrow Brings’. This forward-looking sentiment underpins our Smoothed Bonus Funds that help investors and those saving for their retirement to weather market headwinds and reach their destination – the best retirement income possible.

Because of this, Old Mutual’s Smoothed Bonus Portfolio is focused on and committed to delivering sustained long-term results for employers whose retirement funds we manage and for their employees who count on us to secure their pensions.

I believe this is one of the reasons why Old Mutual continues to be the leading provider of Smoothed Bonus Funds in South Africa, and why we are ready for whatever the future brings. It is up to us to shape it in positive ways.

Find more articles by and interviews with Old Mutual Corporate’s senior management under Our Expertise on our resource hub.