Ethical strategies and Shariah are not mutually exclusive; we believe they go hand in hand, said SEDCO Capital’s Managing Director Kamran Butt at the 2nd Ethical Finance conference in Edinburgh.
The conference, which took place with the support of the UK government, brought leaders in responsible investment firms from around the world to discuss the complex issues around ‘making a profit while having a purpose’.
SEDCO Capital, one of the largest asset managers in Saudi Arabia, was invited to participate in the 2nd Global Ethical Finance Forum to discuss the interplay between Ethics, Faith, Finance and Impact.
Butt said: "Ethical strategies and Shariah are not mutually exclusive; we believe they go hand in hand. In fact, our research has shown that investors from all approaches can enhance their global portfolios by combining both to receive better risk adjusted returns."
Butt participated in the panel discussion entitled ‘Incorporating Environmental, Social and Governance factors into Faith Based investing - Opportunities and Challenges’ alongside the Global Head of Sustainability Indices at S&P Dow Jones and the Chief Investment Officer at Simply Ethical, among others.
The panelists discussed the potential for Islamic finance to have an increasing and demonstrable impact on society through the adoption of an environmental, social and governance analysis towards investment. Butt said: "Islamic finance is the oldest form of a codified ethical investment process, at SEDCO Capital we have been investing this way from our very beginning. We have started to see a growing adoption by ESG investors that are incorporating Sharia principles, because there is huge overlaps between the two."
The two-day conference included discussion on a wide variety of topics such as sustainable capitalism, scaling up impact investments, tracking the growth of responsible investment and putting sustainability at the heart of banking practices.
The participation from SEDCO Capital comes shortly after Hassan Al Jabri, SEDCO Capital’s CEO, launched the firm’s new Prudent Ethical Investing (PEI) investment strategy, integrating Shariah-compliant investment approach with ethical investing.
PEI stresses the importance of due diligence and transparency around investment structures, processes and reporting while also integrating the analysis of environmental, social and governance criteria in the investment process. The strategy seeks to avoid high financial risk and aims to enhance long-term risk-adjusted returns.
SEDCO Capital was the first Saudi asset manager and the first fully Shariah-compliant asset manager to become a signatory of the United Nations Principles of Responsible Investing (UNPRI), an initiative started by former UN Secretary General Kofi Annan. This principle-based framework called for the incorporation of environmental, social and governance variables when analyzing risk for any investment.
SEDCO has seen a sharp rise in the number of investors seeking out its PEI investment products. International investors can choose from over 14 SEDCO Shariah-compliant investment strategies in Luxembourg with total AUMs of $1.8bn. Shariah-compliant asset managers are now recognized globally as providing exceptionally strong platforms.
SEDCO Capital is a leading asset manager offering investment solutions in a wide scope of geographies and diverse range of asset classes. Having established a strong track record of advisory services and investment management, SEDCO Capital currently manages assets in a diversified spectrum of investments in real estate, equities and other businesses with a total AUM of about $5 billion.
The company follows the highest standards of corporate governance rules and practices including the use of advanced information technology systems. With a successful long term track record, SEDCO is committed to offering innovative Islamic-compliant investment products and today has the largest Shariah-compliant investment fund platform through its SEDCO Capital Global Funds platform. - SG
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