Investing with a sustainable preference

Alex Brandreth

By Alex Brandreth, deputy chief investment officer, Brown Shipley.

There is a subtle change occurring within the investment landscape. This change is challenging the status quo as investors are becoming increasingly interested in the social benefits behind how and where they invest their money.

Sustainable investing (often spoken about through an Environmental, Social and Governance lens) has been growing in popularity over the last decade and is moving to a point where it is becoming the norm in terms of how investments are appraised. Governments and inter-governmental organisations, like the United Nations, are doing their part to reinforce this behaviour.

The latter has launched the Principles for Responsible Investment which has 1,900 signatories with $70 trillion assets under management. As they have led, the investment industry has followed.

Historically, it would have been a fair argument to suggest that the range of investment products available in this space was rather limited and importantly the investment performance these products generated was below average.

This is no longer the case and there has been an increase in the number of products available both with an active and passive investment style approach. The growing number of participants within the industry has increased the competition and lifted the bar in terms of performance. The result has been that some of the strongest performing investment products over the last five years have been those that have been with a sustainable bias.

The Brown Shipley investment approach has always been flexible and sensitive to the evolving needs of our clients.

It is imperative that we stay true to how we have invested historically and with the client at the centre of our approach. What is ethical to one client can be completely different to the next. Over the last few years, we have partnered with a market leading research provider, Sustainalytics, which enables us to focus on what is important for the client.

We use their portal to screen investments on over a dozen metrics such as alcoholic beverages, tobacco and military through to the production process behind palm oil or those that offer pork products. As a result, when a client expresses an interest in sustainable investing, the relationship with Sustainalytics means we can tailor the portfolio to what is important to them.

Therefore, over the next five years we expect the sustainable investing area of the market to continue to mature and grow in terms of both products available and assets invested.

The value of investments and any income from them may fluctuate and are not guaranteed. Investors may not get back the amount originally invested. Past performance is not a reliable indicator of future results. Currency fluctuations may cause the value of underlying investments to go up or down.

For further information visit https://brownshipley.com/

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