This year has been one of weather extremes. By April, the UK had already experienced almost 100 wildfires, making 2019 the worst year for such fires on record. Flooding in Lincolnshire in June drove hundreds of people from their homes. Then a late-July heatwave engulfed Europe, sending temperatures in France above 45 degrees for the first time on record. With such terrifying evidence of climate change before us, combating it has never been more urgent.
Investors hoping to incorporate environmental or other ethical concerns when investing, face a litany of acronyms and terminology: sustainable investing, environmental, social and governance (ESG), Socially responsible investing and social impact investing, to name a few.
We are delighted to have been invited to create a model fund-based ‘ethical’ portfolio for readers to follow. But before we introduce you to our fund selection, let’s quickly establish our approach to the task in hand.
Sustainable investing is not just about buying ‘green’ and avoiding ‘sinful’ stocks; it’s also about recognising that sustainability issues can influence a company’s performance. It makes sense to consider environmental, social and governance (ESG) factors when investing, particularly if you have a long-term perspective.
The world faces numerous challenges, from climate change to modern slavery. But while these issues grab the headlines, what do they actually mean for investors? How are these issues reflected in investment decisions? And is there a gender divide when it comes to investing with the planet in mind?
At Aberdeen Standard Investments, we are long-term investors. A critical part of this means knowing and understanding the environmental, social and governance (ESG) factors affecting the prospects of the investments we make on behalf of clients.
Amazon is not a company normally associated with meaningful strides towards a low-carbon future. Although e-commerce is typically better for the environment than heavily air-conditioned, high street stores, speedy deliveries carry a high carbon cost.
Any Amazon shopper may feel a pang of guilt – myself included – at using the one-day delivery service, but the feeling may be unwarranted.
Royal London Sustainable Leaders, as the name suggests, focuses upon sustainable businesses. “Our investments are skewed towards companies with products and services that support transition to a cleaner, safer and more sustainable world,” says Mike Fox, who has managed the fund since 2003.
Fox says the fund’s stockpicking process is primarily bottom-up. However, alongside the usual fundamental analysis expected of any stockpicker, he also looks at the sustainability credentials of each company.
Ethical, socially responsible, green, sustainable or impact investing: call it what you will, there’s never been a greater choice of investment products designed to help your money make a positive change in the world.
Sustainable investing is gaining traction among retail investors, and not just with millennials and women. People of all ages and genders are looking to increase their investment in companies with good environmental, social and governance (ESG) standards.
Sarasin Responsible Global Equity is unusual in having a prescribed ‘buylist’ from which the manager can choose. The list of 120 equities is constructed by a team of 15 analysts at Sarasin & Partners, the fund’s managing company, headed by Jerry Thomas, co-manager of Sarasin Responsible Global Equity as well as a number of the company’s other funds.