“RESPONSIBLE INVESTORS BELIEVE THEY CAN ENCOURAGE AND
SHAREHOLDER VALUE—BY ENGAGING WITH COMPANIES ON
50 cayman captive 2018
ENACT GREATER POSITIVE CHANGE—AND INCREASE
ESG ISSUES RATHER THAN BY DIVESTING.”
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ESG a risk mitigator. But, for the one out of three respondents who does
see ESG as a risk mitigator, it will be crucial to ensure they engage
with investment managers who share that belief. Captives who are
interested in taking advantage of this approach can employ an ESG
overlay to provide risk mitigation and potentially increase your riskadjusted
The value proposition inherent in ESG investing is becoming more
apparent all the time. Even as data remain imperfect, investors can
see and feel the impact on their portfolio values. There are examples
of value that is spectacularly destroyed by companies with poor ESG
standards, particularly those with high-profile scandals or environmental
There are reasons why captives initially choose to be domiciled in
the Cayman Islands, and it has less to do with the natural beauty of
our island, the preservation efforts of our shores and wildlife and what
lies beneath our oceans. However, a Cayman culture that incorporates
strong ESG factors keeps directors coming back year after year.
We invariably see the importance of investing in companies with an
approach that is better for the environment and for society. Seeing value
created by ESG investing requires commitment to an ESG approach
as well as to skilled, knowledgeable analysis and long-term ownership.
As ESG integration becomes more prevalent in investment, those
commitments will continue to spread across the industry and asset
owners will be all the better for it.
Figure 4: Do you think of ESG as a risk mitigator?
27% 33% Not sure