Powering Better Investments
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Veteran investor Joseph Bernhard Mark Mobius, Founder, Mobius Capital Partners, advocates ESG-based investments and inspires people to invest for good — to make the world a better place. While tons of us think of being wealthier, Mobius’ focus lies in doing good globally by changing the corporate responsibility mindset. How do you do that?
Entrepreneur India got in an exclusive chat with the man where he spoke about everything related to investment and making the world a better place.
Companies that have good ESG (Environmental, Social & Governance) credentials perform better, according to Mark Mobius, who was recently in Mumbai to promote his latest book ‘Invest For Good – A Healthier World And A Wealthier You’. The tremendous interest among investors in ESG issues encouraged the investment guru to pen down this book.
Mobius said more and more people are investing in passive funds and exchange-traded funds (ETFs). “We would love to actively invest in companies that rank higher in ESG in emerging markets, which may seem risky today but holds a promising future,” he said. Mobius aims to create a better world and makes his investments accordingly.
“If companies adhere to ESG standards, they will outperform those who do not. The reality is that companies that score high on ESG tend to do better,” he shared.
Keeping the environmental standards in mind, Mobius, in an effort to contribute to society, has invested in a company that makes proper toxins from imported used carpets. “Once the new carpets are made, the water used in the process is cleaned before it is cleared off,” he said. Mobius calls it a win-win situation as it is being environmentally friendly, and gives more benefits to the consumer. Mobius says companies have the choice of polluting and not polluting and if they choose a pollution plan, they get into trouble sooner or later by either the government or the society.
Role of Good Governance
With rampant bribery and corruption, governance is extremely critical. To do anything, it is important to have someone who understands the implications of what the environment and his shareholders want. Explaining further, Mobius said, “He wants to make money and make a difference for shareholders. He is aware of what his workers and employees are doing. He’s also aware of what the environmental implications are. So this is good management, but then, you can’t leave it to one man.
There has to be some checks and balances. There has to be a Board of Directors.” The Indian government, Mobius insists, needs to create simple schemes. “If the objective is to make them invest then the way they're doing is not the right way. For example, they could impose a turnover tax. In other words, whenever anybody buys something, the tax percentage of what they're investing, that's a much easier tax to impose and to regulate,” he suggests.
Where to Invest?
Mobius’s company has been investing in financial and manufacturing companies related to restructuring manufacturing and software in India. “One should start with Hong Kong and Taiwan because of tax. In India, you should chase the medium-sized companies that have their finger on the pulse of the consumer,” he said.
Explaining further, he said one must invest in number stocks that are adjusting to these technologically changes.
Getting Personal With Mark Mobius
(This article was first published in the October issue of Entrepreneur Magazine. To subscribe, click here)