The team recently attended the Impact Investment Academy in London. We did this because we all believe that our investments and pensions have great power to change the world we live in.
Following COP27 it is easy to feel depressed about the failure of politicians to address what seem obvious issues for the future of our world, and fear that vested interests will continue to frustrate progress.
It would be encouraging to see more commitment and courage from world leaders, but in their absence, what are the things we can influence? I refuse to accept there is nothing I as an individual, Serenity as a company, and Club Serenity collectively can do.
Over the last few years we have seen increasing interest in reducing our impact on the planet with greater use of recycling – and even better, less use of plastics in the first place – low energy light bulbs, solar panels, electric/hybrid cars etc. So, it seems a natural step to think more about where our money is invested.
The question is can your pension and investments be doing good while you are not using them?
The traditional approach to investment would be to enjoy income or growth, and then donate some of this profit to good causes through charitable giving. On one level that seems reasonable, but it’s also very odd if you think it through.
For example, most large funds will be investing in tobacco companies, but then you give money to Cancer Research. Does that make much sense?
The other day I came across a quote from an oncologist:
“When you invest in a company, you own part of that company. You want that company to grow and succeed and thrive. You want that company to attract new customers. You want that company to sell more of its products. When it comes to tobacco, I could not think of anything that I wanted less.”
We might apply the same thinking to oil and gas companies, coal mining, armaments, animal testing etc.
But what are we looking to achieve? How do we agree on which areas are important and which are less so? Is it just avoiding companies which are harmful, or could it be about supporting companies which are trying to do good?
For Positive Impact investors the primary objective is that any investment should be beneficial to people and the planet, and capital will only be allocated to companies whose products and services help solve social and environmental problems.
By focusing on these businesses, we have the opportunity not just to look at reducing carbon emissions and bio-diversity loss, but also invest in innovative healthcare research, social and digital inclusion etc.
Of course, investment returns are still important. We are financial planners, so you should expect us to invest your money effectively to meet your objectives. But how would it feel if it was being used to make a difference to people and our planet?
Every investment has an impact, so the fundamental question is do you want that to be for good or not?