Blue Chip 95

BLUECHIPCOLUMNESG: the

BLUECHIPCOLUMNESG: the heartbeat of responsible adviceNow more than ever, ESG considerations are not optional extras – they are central to responsible financial planning.Kobus Kleyn, CFP®,Tax and FiduciaryPractitioner, Kainos WealthKobus Kleyn, CFP®, is a leadingfinancial planner and tax andfiduciary practitioner in SouthAfrica. He has published over200 articles, authored sixbooks and co-authored threemore. He is a multiple awardwinningprofessional and holdsmemberships with eight localand international professionalassociations. His awards includefour from the FPI (one of them aLifetime Achievement Award)and two from the Million DollarRound Table; a Lifetime Awardand the President’s Award. Healso received the Liberty GroupLifetime and INN8 DiamondAward for Best Overall Impactand Contributions to the AdviceProfession in South Africa.As fiduciaries, our role extends beyondproduct advice or portfolio performance.We are, in essence, stewards of our clients’legacies – charged with navigating themthrough uncertainty while honouring their values,families and future.Environmental, Social and Governance (ESG) is nota tick-box exercise or a flavour-of-the-month theme.For me, ESG is about meaningful alignment betweenour clients’ investments and their broader life story.It’s about legacy. It’s about sustainability in thedeepest sense – not just market sustainability, butpersonal sustainability.The world has changed. Climate events havebecome more frequent. Inequality remains deeplyentrenched, particularly here in South Africa.Governance failures – from state capture to corporatescandals – have eroded trust across institutions.Clients are no longer asking if their money is makinga difference. They’re asking how.A growing number of my clients – particularlythe next generation of professionals and businessowners – want to invest in a way that reflects theirbeliefs. They want their financial plans to “do noharm” and, ideally, “do some good”. They ask whethertheir portfolios support clean energy, their retirementsavings avoid extractive industries and if theircorporate structures align with ethical tax planning.We cannot ignore these questions. ESG is afiduciary imperative.South African ESG contextIn our market, ESG brings its own unique challengesand opportunities. South Africa’s just energy transitionis not only an environmental concern, but also a socialand economic one. Unemployment, energy insecurityand structural inequality create complex trade-offs.This is where local expertise becomes vital. It’snot just about applying a global ESG filter. It’s aboutcontextualising impact. For instance, a miningcompany with strong local empowerment credentialsand carbon transition plans may offer more ESGintegrity than a foreign-listed green fund with littlesocial footprint here.ESG requires due diligence, not default settings.It means understanding what each client values andmatching that with real-world, measurable outcomes.ESG and fiduciary dutySome advisors fear that ESG compromises returns.The data says otherwise. Multiple studies – includingwork by Morningstar and MSCI – show that wellconstructedESG portfolios deliver comparable oreven superior risk-adjusted returns over the long term.Beyond performance, ESG speaks to the coreof fiduciary duty: to act in the best interests of theclient. And best interests today include ethicalalignment, intergenerational fairness and long-termrisk mitigation.In fiduciary planning, we talk about protectinglegacies – trusts, wills and business succession. ESGsimply extends that thinking. What kind of worldwill our clients’ grandchildren inherit? Will theirinvestments reflect the values they shared around thedinner table? Will their wealth preserve ecosystems,uplift communities and reward transparency?Practical steps for plannersSo how do we integrate ESG meaningfully into ouradvice process?Start with values-based conversations. Don’tjump straight into selling products. Ask what matters.Many clients have never had the space to connectmoney with meaning.Use independent ESG research. Filter beyondmarketing material. Tools like Sustainalytics or localESG rating providers guide product selection.Evaluate fund mandates. Look for fund managerswith clear stewardship records.Incorporate ESG into compliance checklists.Include ESG as part of your record-keeping and clientreview process.Collaborate across professions. ESG touchestax, estate, legal and insurance planning. A multidisciplinaryview strengthens outcomes.Financial freedom is not just a goal – financialfreedom is a journey. ESG ensures that this journey isnot only profitable, but purposeful. Let’s ensure thatwhen our clients build wealth, they also build a worldworth living in. 18 www.bluechipdigital.co.za

MEET THEMANAGERS10th June Johannesburg12th June Cape TownNEWINDUSTRYSURVEY