The majority of our clients invest in portfolios which adopt an ethical investment approach. We believe – although this can never be guaranteed – this will lead to better, more consistent performance as it takes into account a wider range of factors which might affect how companies grow, or don’t, in the future.
But more importantly, we believe it is the right thing to do for the environment and society at large.
A recent study from Make My Money Matter – https://makemymoneymatter.co.uk/21x/ – showed that ‘greening’ your pension fund is 21 times more effective at reducing your carbon footprint than giving up flying, going veggie and switching energy provider combined.
This does not mean you should stop doing these other things, but as financial planners this finding is hugely powerful and inspiring. Their research focussed on pensions, but exactly the same principle applies to your other investments.
At Serenity, we look at the issue in two ways:
- Environmental, Social & Governance (ESG)
- Positive Impact
ESG screening takes our long-standing evidence-based investment approach, and adds to it. This is not just about excluding ‘harmful’ companies, but analysing where there are risks which may not have been properly assessed and opportunities for growth, by looking at companies through these three criteria. It is still, fundamentally, an investment driven approach.
Positive Impact investing turns this on its head. Managers are still required to make money for their clients, but the key consideration is that they invest in companies providing products and services which help to solve social and environmental problems.
We thought this month, we would show you the impact that funds held by our clients in this approach has, and how it can change the lives of others, to protect and provide a better world for our children and grandchildren.