Environmental, Social and Governance (ESG) Investing

Environmental and socially responsible investment has become increasingly important to our clients.  In recent years, the world has realised that our purchasing decisions can play a crucial part in addressing the biggest challenges faced by society. We see how global brands seek to identify with powerful movements. Examples include the following:

• Nike supporting NFL star Colin Kaepernick
• Companies boycotting Facebook in order to support Black Lives Matter
• Sky attempting to go net zero carbon by 2030
• Lego attempting to use entirely sustainable materials by 2030

The same applies to investing. Over $30 trillion is now invested according to environmental, social and governance (ESG) criteria. This continues to increase.

ESG funds may fall into the following categories:

• Socially Responsible Investments
• Ethical
• Sustainable
• Climate Change

At first, ESG investments were considered as on the fringe but it has now become mainstream.

Clearly, environmental issues – the ‘E’ in ESG – have been at the forefront of media coverage for some time. However, the importance of S and G factors is growing. For example, there is genuine dismay among many for companies that use sweatshops and flout the minimum wage. As a result, investment companies have increased the number of funds invested in ESG. They also actively screen and challenge the companies in which they invest. This ensures they are compliant with investor values.

Equally importantly, there is no evidence to suggest that investing in ESG-compliant companies is to the detriment of portfolio performance. One main reason is that when you select companies based on their ability to reduce environmental and regulatory risks, you also reduce potential financial risks.

We invest in a socially responsible way, wherever possible. We are also very aware of the community of which we are a part. This is reflected in how the business supports local charities.

Of course, everyone has their own idea of what is socially and environmentally acceptable. The same applies to the wide range of ESG funds. Some have very strict criteria. Others may select the best of a group, even if it does not meet all the criteria. After all, social responsibility and corporate governance is subjective.

We are skilled and knowledgeable when it comes to ESG investments. This includes the various funds you may wish to select and how to ensure a close match to your values.

At Henson Crisp we understand and appreciate that each of our clients is unique.  We respect your personal values and pride ourselves on being able to support you to carry these forward in your investment planning.