It isn't always black and white
In summary, Sustainable investment funds seek to do less harm and do more good, in terms of behaviours, sustainability and global impact.
We believe it is important to understand the individual client's beliefs and preferences, then match them to a suitable solution. This can be easier said than done, because although many solutions look similar on the surface, you have to have a clear understanding of what each is specifically trying to achieve and therefore what they invest in.
For example, you might think that investments in Adidas, Europe's largest sportswear designer and manufacturer, would have no place in a Sustainable investment portfolio, because of their use of plastics and other non-recyclable materials.
However, for a few years Adidas has been at the forefront of the development of a fully recyclable running shoe. When you consider the millions of running shoes and trainers sold and thrown away around the world each year, this has the potential to be a massive benefit to the environment in years to come. There is a striking line at the start of this short Adidas promotional video which struck a chord with us:
"This concept of throwing something away. Nothing gets thrown away. There is no 'away'. It is just somewhere else."
Sustainable investment expertise
The Adidas example illustrates that Sustainable investing is arguably more complex than 'traditional investments', which is why we work with Sustainable investments specialists who have access to the latest information and research, and can really get under the skin of a company and its Sustainable investment credentials.
The Sustainable portfolios we typically recommend will be managed to provide investment in a diverse range of Sustainable assets which are maintained in line with certain investment risk parameters.
The fund managers make the investment decisions about the underlying holdings, giving confidence that duly qualified experts with the necessary skills and experience are continually reviewing the portfolios. Another element to this is that they can blend together different underlying investment styles, to complement other holdings and provide wider growth potential.
Why invest in Sustainable solutions?
Alongside generating a good financial return, many individuals also want to help solve some of the world's problems. For example, they may want to tackle climate change, finance energy transition from fossil fuels, or improve people's wellbeing. In the past, investors in such funds have had to bear slightly higher charges or weaker fund performance, but charges and investments returns are now much more competitive with traditional investment solutions.
- Sustainable trends continue to gather momentum.
- Record numbers of governments and businesses have made climate and social commitments.
- There is a structural shift in attitudes away from 'old world' businesses and towards those that will help the world navigate the challenges we face.
It is fair to say, historically, that investors faced a difficult choice of either investing in line with their ethical beliefs or investing to provide an attractive investment return.
We believe those days are over. The range of readily available Sustainable investments solutions has improved rapidly in recent years, in terms of choice, investment performance and cost, and the pace of that change will only continue and increase.
We believe in Sustainable investment not just for the sake of it, but because it provides attractive investment potential and is the right thing to do for the world.