What is ESG Investing?

Increasingly, investors are concerned that the companies they invest their money in, may not hold the same core values that they do when it comes to the impact of the company on the environment, the treatment of their employees and the impact of the company on the wider community.

We have seen larger institutional investors use their considerable voting power at the annual general meetings of companies to vote against the board where they believe the company’s behaviour in these areas is negative. In some instances, these investors have disinvested in the company altogether where they do not feel changes are likely.
Some investors take this further and will only invest in funds where they believe their investment will have a positive impact on the environment. This is known as Impact Investing and examples of this can be seen in the recycling and renewable energy sectors.
Some other terms used to describe different aspects of this overall sector of investing are as follows:
– Sustainable investing
– Thematic investing
– Socially responsible investment
– Green investing
– Responsible investing
– Values aligned investing
– Ethical
– Activist investing
– Responsible project finance
– Mission led investment
– Impact investment

Here are some examples of factors affecting ESG investing decisions:

Climate change and carbon emissionsGender and diversity policiesBoard diversity
Air and water pollutionSafety and quality controlsCorporate ethics
Energy efficiencyHuman rightsExecutive compensation
Waste managementLabour standardsBribery and corruption policies
Water scarcityPrivacy and data securityLobbying activities
Biodiversity and deforestation  Employee engagementAccounting practices  
We offer a range risk graded ESG portfolios that address these very real issues. They can be included to run alongside traditional investment portfolios, or to replace them altogether.
Important Information and Risk Warnings
Past performance is no guarantee of future returns. The value of investments may go down as well as up and you may not get back the amount invested. For stocks and shares ISA’s, tax-free means free of Income and Capital Gains Tax in the hands of the investor. Future tax benefits may be different to those prevailing today. In addition to the investment risk outlined above, the unit price of international funds can fall due to currency exchange rate fluctuations.
Almost all financial transactions carry some element of risk. Some of these are highlighted below:
– The value of units or shares can go down as well as up.
– For overseas funds, fluctuations in currency rates can affect the value of your investment.
– Past performance is not a guide to future performance and is no guarantee of future returns.
– You may not get back the amount invested.
– In exceptional circumstances (or if there is a run on a fund holding illiquid or not readily realisable investments) dealings in individual shares, or shares in mutual or other funds, may be suspended for a period of time during which it will not be possible to buy or sell affected shares.
Please note that where past performance figures have been quoted, they do not guarantee future investment growth and should not be used as a guide to future gains.