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The OIKOS connection Wednesday, Jul 24, 2019

OIKOS. The Greek word for “home” is the root of both “ecology” and “economics”. Ecology is the study of natural systems, and economics is the study of a human system or human market systems. Therefore acknowledging the economic value of the ecosystem that we are part of, and that it is our duty to live responsibly is obvious.

If we are to make progress, we must consider ecology and economics as two sides of the same coin. No growth is sustainable if it’s not cohesive with the environment. Although the past few decades of rapid economic growth have brought many benefits to India, however, it has been clouded by a degrading environment, exposing the population to serious air and water pollution. A recent world bank report finds that environmental degradation costs India $80 billion per year or 5.7% of its economy. Green growth strategies are needed to promote sustainable growth and to break the pattern of environmental degradation and natural resource depletion. Emission reductions can be achieved with minimal cost to GDP.

The Kuznets Curve

The Environmental Kuznets Curve is a mathematical formula that explains the relationship between environment equality and economic development. According to the curve the environment will worsen until a certain point where the country reaches a specific average income. Then money is invested back into the environment, and the ecosystem is restored.

In the U.S., for example, greater income makes it possible to purchase electric cars which use less oil and don't pollute as much.

However, while Environmental Kuznets Curve might just be a hypothesis, it does make an important point of giving back to nature.

It is important for us to understand that economic growth is only sustainable if we act responsibly towards our environment. In order to help economy grow keeping in mind the ecology aspect, we as investors should invest in environmentally responsible businesses.

It is a win-win situation for an investor, as these businesses that opt for environmentally sustainable future in turn enjoy sustainable earnings and profits.

As an effort to complete our equity bucket of funds, we have launched a fund that aims to achieve growth by investing in sustainable businesses by following the ESG (Environmental, Social and Governance) route. This relatively new concept to seek growth – Quantum’s ESG fund invests in companies that focus on 3Ps; Planet, People and Profit. It is time to make money by making a difference to the world we call our home. After all, Oikos aka home is where we belong!

Data Source: World Bank


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Quantum India ESG Equity Fund

(An Open ended equity scheme investing in companies following Environment, Social and Governance (ESG) theme)
• Long term capital appreciation

• Invests in shares of companies that meet Quantum’s Environment, Social andGovernance (ESG) Criteria
Quantum Long Term Equity Fund
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