Ethical Investments – a new way to grow
What is ethical investing?
Ethical investing is when individual investors choose the assets and stocks they will invest in based on their own ethical values and beliefs. This can range from excluding specific firms that operate in areas such as gambling, tobacco, animal testing, weapons or alcohol or by selecting funds that the consider a range of ethical factors and/or delivers positive ethical outcomes. Positive ethical outcomes can include social and environmental benefits. (moneyfacts.co.uk)
Environmental, Social and Governance (ESG) themes represent the largest current growth area in both investment management and in financial advice. For example, asset manager Blackrock predicts that the percentage of global AuM managed with an ESG focus will increase from c.8% in 2019 to c.28% in 2029.
Just what is Responsible Investment?
Responsible Investment is a strategy or practice to incorporate Environmental, Social and Governance (ESG) factors in investment decisions and ownership activity.
So, what’s the size of the opportunity?
It’s becoming extremely apparent that there is a shift in attitudes towards responsible investing. In addition to the figures that Blackrock predict, research from The Economist Intelligence Unit (EIU) found that 76% of younger generations in the UK say it is increasingly important to consider ESG factors when investing, compared to 37% of older generations.
“Making a choice to invest ethically is not only good for wider society and the environment but ethical investments have been shown to outperform the returns of their non-ethical equivalents. In July 2020 Moneyfacts revealed that 140 ethical unit trusts had grown by 4% in the 12-months to 1 July 2020 compared to a contraction of 1.5% for those not in the ethical category”.
How are we making ESG investments accessible to you?
The ESG line now includes two new funds - Quilter Cheviot Climate Asset Fund and the Liontrust Sustainable Future Defensive Managed Fund. The Quilter Cheviot Climate Asset Fund will be added as a Moderate solution and the Liontrust Sustainable Futures Defensive Managed Fund will be added as a Balanced solution.
Adding an additional spotlight to Responsible Investing
Ethical Investments - a new way to grow; ESG changes are coming and they are really exciting. As mentioned earlier, this is the first steppingstone to having a market-leading ESG proposition and Responsible Investing philosophy.