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Don’t panic, it is time to reset your portfolio towards sustainability

Coronavirus has disrupted the lives of everyone - from rich to poor, from developing to developed economies, from currency to metals… nobody is spared. It indeed makes everyone anxious about securing a sustainable future.

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Last Updated: Mar 24, 2020, 12.25 PM IST
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By Sneha Joshi

Coronavirus has disrupted the lives of everyone - from rich to poor, from developing to developed economies, from currency to metals… nobody is spared. It indeed makes everyone anxious about securing a sustainable future.

Its only when these so-called “black swan” events strike, we are forced to critically evaluate many things, including our investments.

“Are my investments sustainable?”
“Will they truly survive the downturn?”

These are questions that come to our mind. This is when one shifts their investment and life goals to focus towards sustainability and quality. There are more such events like climate catastrophe, which is expected to be more devastating over time. The non-financial factors encompassing the three broad areas of Environment, Social and Governance (ESG) will help determine if the business has foreseen such extreme risks and is prepared to survive such testing times or not.

In the coronavirus pandemic, does the company have systems in place for their employees to continue serving their customers remotely? Sustainable companies would have thought through their business continuity plans and be able to support their customers to the extent possible. Also, a company doing well on the Social factor would also ensure they take care of their employees in such testing times; who will in turn make sure their company thrives during good times.

The broad market indices across countries have fallen dramatically, government bond prices are rising rapidly and the demand for safe havens has shot up drastically. So, what should the investor do?

It is a lucrative opportunity to invest in companies that are foreseeing qualitative risk along with usual business risk, companies that are taking care of the health and safety of their customers and employees, companies that have higher probability to survive in down markets and companies that understand and regard the impact of material risk on their net worth. It is rightly advised that in times of panic, invest in high quality!

This virus outbreak serves as a reality check to force a sustainable environment and to choose what you want to pass on to the future generation. Investing in sustainable companies is a chance to have a better, sustainable and cleaner environment. It should be our priority to take care and secure our family against any potential disruptions and steer clear from companies which contribute to it..

Although this outbreak is not related to the choices we make in life but it surely does give us a moment to rethink. Is it a time to choose responsibly, time to take an urgent decision, time to stop ignoring what can happen if we continue to take the resources around us for granted.

The current fall in equity markets is one more reminder to invest more responsibly for your sustainable future into businesses that are prepared and are leaders in their industry when it comes to sustainability practices that would help them survive the downfall. Stop pushing the panic button and just click to invest for a sustainable and responsible future for you and your family.

(The author is the associate fund manager- alternative investments, Quantum Mutual Fund)
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)

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