Whether it’s the Extinction Rebellion protests or Greta Thunberg’s speech to the UN, there has been a renewed focus on climate change in recent months and what individuals can do about it with ethical investing.
This has led to calls for investors to divest funds away from ‘harmful’ industries and sectors such as oil and gas, mining and airlines, which are some of the biggest producers of carbon and other greenhouse gases.
This doesn’t just apply to organisations with millions of pounds at their disposal.
Ordinary investors also have opportunities to ‘green’ their ISAs and pensions with more ethical investing options now available:
Ethical funds: are funds taking a more principled stance on investment choice. Many screen out companies or sectors that do not meet their guidelines, which vary from fund to fund. Some older funds traditionally avoided sectors such as alcohol and armaments. Today many have a more environmental remit. However, while some funds exclude whole sectors such as oil and gas, others take a ‘best of breed’ approach, investing in companies with better records on issues like pollution, water waste and recycling.
ESG investments: funds that adopt this approach take into account environmental, social and governance (ESG) factors, alongside standard financial data, when deciding whether to buy or sell a stock. This can help identify whether the company is likely to be a profitable long-term investment in a world which is more environmentally aware.
Jim Rixon, Independent Financial Adviser and Sustainable Investment specialist at Pembroke says “You may be a relatively small investor. But it’s worth bearing in mind that the UK pensions industry is worth over £2 Trillion! While your retirement funds are managed on your behalf, you can most definitely direct where this money is invested.”
Independent Financial Advisers and Investment specialists, Pembroke Financial Services are delighted to announce the completion of a suite of responsible investment portfolios to cater for all risk appetites. The November 2019 launch of the Better World Growth portfolio means that we now offer our clients a full ‘collection’ of ethical investment offerings to complement our Better World Cautious and Better World Balanced investment portfolios. As a track record, we have managed an Ethical Balanced investment portfolio since November 2009 which shows a 10-year annualised return of 8.27% net of fund charges (Source FE Analytics to 8th January 2020).
We are proud of the returns we have generated for clients from this portfolio, proving that the received wisdom – which had been, up until now, that investing ethically was ‘niche’ and an area where you would inevitably have to compromise investment returns – has changed.
There is no doubt in our minds that investing ethically will become the new norm. Please contact us if you feel that we can help you. Call 01273 774855 or email us by clicking here.
The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.