Our members provide their expert opinion on investing ethically
There is no doubt that 2020 has been an incredible year
for ethical/ESG investing (regardless of how the rest of this year has gone!).
Asset flows into the area have been astonishing and we are happy to say that it
is through the efforts of many in our network.
As we've seen so many investors enter this area for the first time, we were
keen to know what advice would our investing members would give to those who are
still new to the sector.
Here's what our experts had to say:
Patrick Thomas, Investment Direct and Head of ESG,
Canaccord Genuity Wealth Management
choice as to the particular letter of E,S, and G that you care about
and use that as a framework for picking your investments. Because,
despite what data providers or overzealous fund
managers might tell you, there is no investment out there that is
environmentally very important, has amazing corporate governance, and a
positive societal impact.
Kate Capocci, Investment Manager and Lead ESG
Specialist, Smith & Williamson
Look beyond the labels. Many fund will label themselves as
sustainable, ESG or responsible but will have varying approaches when
it comes to achieving this. Whether this be through exclusions,
targeting specific themes, or buying best-in-class. All of these
approaches are valid, but may not achieve the specific sustainable
objective that you had in mind. For example, some responsible
funds will invest in fossil fuels, but wouldn't be appropriate to you
if you intend to exclude this sector.
Cléo Fitzsimons, Sustainable Investment Lead, Cazenove
Do your homework! Don’t take all the information on ESG that is told to
you for face value, make sure to apply your own analysis and pick the
investment that is right for your sustainability and investment objectives.
Barry Cowen, Senior Portfolio Manager, Sanlam
Separate E. S and G. They are linked, but they are not the same.
Understand the degrees and way in which a fund is focused on each
element and then how relevant it’s focus is to what you are looking
Tim Cockerill, Investment Director, Rowan Dartington
Think about which areas of ESG are of particular interest to you and
the impact you want to have with your investment, and then select funds
which are aligned with your values.
let the different terminologies and jargon surrounding sustainable
investing put you off from getting involved – a healthy range of
approaches is an important part of keeping the field diversified and
avoiding greenwashing. Just make sure you are given clear and
transparent explanations of a company’s approach, as well as concrete