Investing whilst listening to your moral compass or considering your ethical preferences has been around for many years. Friends Provident entered the market with their Stewardship range of funds in the early 1980s and we should remember that Prince Charles has been talking to plants for well over 30 years. The spotlight on investing in an alternative manner has been pushed to the forefront by programs such as The Blue Planet (2001), Blue Planet II (2017) and A Plastic Ocean (2016).
David Attenborough’s 2021 New Year message provides some positive commentary that acting now in terms of what we do and how we consume products can make a difference to the health of the planet. Many of us will be aware that the first Covid 19 lockdown in March saw an improvement in air quality in the UK’s main cities such as London, Birmingham and Manchester. This backdrop of information and reporting has seen a surge in interest from many people in making their money work hard for them whilst wanting to improve future prospects for flora and fauna as well as the working conditions of people’s lives.
As you would expect, when an approach to investing becomes more popular or mainstream so do the potential solutions and options available. Therefore, it is important that a strict underlying investment process is in place to avoid so called “Greenwashing”, the concept of funds and firms marketing products and investments to appear more sustainable and ethical than they really are.
Our Wingate process introduces a rated Environmental, Social and Governance (ESG) score between 0 and 3; 0 being poor and 3 making strong efforts to comply with the concept and process. We clearly state what we feel Responsible Investing means, broken down into Exclusion, Sustainable and Impact funds. In an investment universe awash with possible funds we think it is important to engage a respected independent, third party research company to help us make an informed choice on behalf of our clients.
Whilst considering an approach to investing, preferences such as sustainability e.g. looking at alternative energy sources to fossils fuels, it is important to dispel the myth around cost and performance. A responsible investment portfolio will not necessarily be any more expensive than a more mainstream active portfolio which ignores ESG filters. In addition, historic performance of many ESG – Responsible funds bears up to scrutiny and often surpasses the performance of conventional unfiltered active funds.
If you would like to review your existing investments, pensions, ISAs and other savings to see how they match up to your green credentials please do make contact either directly or with your usual Wingate financial planner.