Environmental, social and governance (ESG) investors considering how to gain exposure to inclusion-themed stocks could find themselves scratching their heads for ideas.
The UN defines social inclusion as the process of improving the terms of participation in society for people who are disadvantaged, by enhancing opportunities, promoting access to resources, and respecting rights.
But this theme is not easy for investors to access, despite its clear benefits to society through better health, educational and security outcomes.
Investing in social inclusion yields multifaceted benefits. It promotes societal cohesion by reducing disparities, fostering empathy, and creating a more harmonious community.
It also boosts economic growth by tapping into the diverse talents, skills, and perspectives of a wider population, thereby enhancing innovation and productivity.
Socially inclusive policies lead to better health outcomes, improved educational achievements, and reduced crime rates.
Inclusion is one of the most difficult areas in which to find listed companies making a positive impact. But we have uncovered some fantastic companies which do exactly that, in which we are proud to invest.
American Tower
As a US-based owner of mobile phone towers, American Tower’s inclusion credentials may not be immediately apparent. But they own and operate mobile phone masts across much of South America, Africa and Asia.
In fact, over 75,000 mobile phone masts, or half the company’s portfolio, is in emerging markets. In this way American Tower enables access to information services we take for granted such as healthcare, government services, and banking as well as general communication.
These areas often don’t have good fixed-line infrastructure making expansion of the mobile network the best method of improving connectivity.
HDFC Bank
HDFC Bank is one of the leading financial services providers in India. The bank has identified an improvement in financial inclusion as an important growth driver, as it expands its branch network in rural areas.
Financial inclusion means that people have access to financial services such as payments, savings and insurance. The World Bank considers financial inclusion an important weapon in the fight against poverty.
While the proportion of people with a bank account in India increased a lot in the 2010s – to around three quarters now – access to wider financial services remains low. In addition, only a tiny proportion of small businesses currently receive bank funding.
IDP Education
Education is a great facilitator of opportunity and brings huge advantages not just to the individual student but to society at large. IDP Education is an Australian company offering services to students in developing countries looking to study abroad.
IDP helps with information and advice about the application process, and administers English tests required for visa and university acceptance. IDP mainly deals with Indian and Chinese students going to study in the UK, US, Canada and Australia, and almost 2 million English language tests are taken through IDP each year.
Claire Marwick is an investment manager at Aegon Asset Management. The views expressed above should not be taken as investment advice.