Being a responsible investor means taking into account the corporate social responsibility of the funds and firms we invest in and make appropriate choices.
Delivering a return for investors whilst minimising the negative impact on the world around us is the central premise of ESG, or responsible investing.
It is not for us to impose our views on our clients. However, it would probably be safe to assume many of us see challenges ahead that are real, important and in some cases urgent.
In real life we make trade-offs around the choices we make when it comes to improving the sustainability of our lifestyles. For instance, we may make an effort to recycle household waste, yet happily jump in our car to make a short journey.
Likewise we might reduce our dependence on single-use plastics but plan long-haul holidays which will impact the environment. Every day we face decisions which require a trade-off between convenience or price and the environmental and social impact we make.
At our heart we are a Financial Planning firm, existing to help our clients meet their expectations with their savings.
Over years we have developed a proven approach to how investments and savings should be managed. We are not prepared to compromise this approach under any circumstances.
We also need the investment tools to do the job required whilst also following a more aligned ESG methodology. In many cases these are only just becoming available to retail investors.
Creating a balanced sustainable investment portfolio means making some trade-offs. We aim to deliver strong financial returns whilst taking ESG factors into account. Starting with the belief that all investors seek investment growth we believe that systematic ESG investing delivers the best of both worlds.
As a business we are committed, once we identify funds that meet our core credentials and philosophy (low cost, diversified and without “market timing” and spurious “active” decision making), we will incorporate them in our core investment strategies. We call this “steps in the right direction”.
For those clients that want to take an even more defined ESG approach to their money we work in partnership with investment managers that pass our due diligence, follow our evidence-based approach to managing savings and have additional and more extensive research capabilities to tilt and bias a portfolio towards investments with much stronger ESG credentials, and potentially make changes more quickly as new funds become available.
Improving the sustainability of your portfolio is a journey to be taken in small, careful steps.
Today, we are using sensibly structured EGS products where they are available. We maintain the overall portfolio risk structure, and use traditional, non-ESG funds where no sensible options currently exist.
We’re actively seeking better, more robust ESG metrics from companies and the industry is taking a more consistent approach to measurement. We are benefiting from greater insight into the impact of our investment choices.
Ultimately this will lead to a wider choice of better products for the responsible investor. There will be better market index construction covering all asset classes. This supports the UN Sustainable Development Goals which are a blueprint to achieve a better and more sustainable future for all.
We believe in providing our clients with honest, independent and tailored advice, and are delighted to provide ESG investment portfolios that extend beyond simply managing your savings. By investing with us we can together help to build a brighter future for our children and grandchildren.
Someone is sitting in the shade today because someone planted a tree long ago.
– Warren Buffett