Socially Responsible Investing

What is important to you?
Fund Choice and Performance
SRI Investment Approaches

“The greatest threat to our planet is the belief that someone else will save it.”

Robert Swan, Author

Social responsibility and sustainability are becoming increasingly important to investors as they make their financial decisions.

Instead of simply looking at performance, many investors now also want to understand where their money is being invested and what it is being used for, seeking funds which invest in companies that reflect their values and principles and which are driving positive outcomes for the world and its’ people.

Whilst responsible investing is not a new concept, it is having an ever-greater influence on investors’ thinking.   There can be little doubt that it is becoming one of the defining investment stories of our time.

Here at Pannells we understand that many of our clients will wish to invest according to these principles, and so we offer a range of Socially Responsible Investment options.

“We do not inherit the Earth from our ancestors; we borrow it from our children.”

Native American Proverb

We believe that just as we need to fully understand your investment objectives, it is equally important that we understand your values and opinions.

Our advice process will help to highlight the issues that matter to you most.  We will discuss your preferences and priorities, whether it be a general desire to promote positive change or a more specific area of focus, and where possible we will look to tailor our advice to ensure that it is aligned to these values.

Whether you wish to simply dip your toe in the water of Socially Responsible Investing, or you want a larger part of your portfolio to be more closely aligned with your beliefs, our advice process will ensure that we know what is important to you and our research team will then identify appropriate solutions to help meet these needs.

In the past investing according to your principles could come at a high cost in terms of fund choice and performance.  However, this may no longer be the case.

According to research by the Investor Chronicle in December 2019, assets in Environment, Social and Governance (ESG) funds doubled between 2014 and 2019 and 23 new ESG funds were launched that year. The Investment Association reported that the value of assets held in Socially Responsible Investment (SRI) funds stood at £20 billion in August 2019. To date, this sector continues to grow at a pace.

In addition, companies which can demonstrate strong socially responsible profiles, which conduct their business in a fair and progressive way and whose management teams ensure their company is positioned to adapt to long-term transformational changes – such as climate change – may be better placed to operate successfully in the future.

However, as with any other type of investment, it is important to recognise that sustainable investing comes with a risk.  The value of your investments can go down as well as up and you might get back less than you invested.  This approach to investment may not be suitable for all.

There are a wide variety of values-based investment approaches and strategies, some of which may be of greater importance to you and others less so.

They broadly fall into one or a combination of the following themes:

Environment - focussing on issues such as:
• Climate change
• Pollution
• Fracking
• Biodiversity
• Environmental management
• Waste
• Natural resources – water, timber, mining
• Energy
• Low carbon
• Or investing in companies furthering these areas via products/services
Social - focussing on issues such as:
• Human Rights
• Employment standards
• Child Labour
• Equal Opportunities
• Food supply
• Obesity
• Slavery
• Social infrastructure – housing, education etc.
• Or investing in companies furthering these areas via products/services.
Sustainability - which invest in both:
• Companies that have products/services furthering sustainability aims
• Companies that practice sustainability
Ethical - which excludes or avoids companies involved in:
• Tobacco
• Armaments
• Alcohol
• Pornography
• Animal testing/fur trade
• Intensive farming
• Irresponsible marketing
• Business with oppressive regimes
• Gambling
• GM
• Arctic drilling
• Faith-based criteria
ESG - which incorporates the Environment and Social areas outlined above, plus Governance which focusses on issues such as:
• Board Structure
• Executive Remuneration
• Bribery and corruption
• Tax
• Political lobbying
• Transparency
• Interaction with oppressive regimes

It may be that you would prefer that your investments do not have a negative impact on the environment, or perhaps you would like to ensure that your investments have a positive impact on society.  It could be you feel strongly that you do not want to invest in specific sectors.

Whatever your personal choice, our investment process will help to clarify what is important to you and to help find a solution that matches your needs.