We understand that more and more people are choosing to invest responsibly.
Making sure your money is being used for positive change is becoming increasingly important to many people.
Traditional forms of ethical investing have evolved from a negative screen approach, where individuals choose not to invest in companies with poor social, environmental and governance records to a positive impact approach. This is broadly referred to as ‘impact investing’ where individuals identify companies that benefit society and choose to invest their money here.
Ethical investing can be confusing for a new investor, as a wide variety of terms are used in conjunction with ethical. The most widely used and clearly defined term is ESG, Environmental, Social and Governance investing.
Environmental factors are usually based around climate change and natural resources, measured through, among other things, impact to life on land and sea, sustainable consumption, and energy production.
Social factors measure the benefit to the general population, whether this is through benefit to health or reducing poverty.
Governance focuses on the workplace, predominantly through ensuring employee safety, and equality of opportunity and pay.
ESG integration is used by managers and investors through external data to facilitate the most successful strategy to achieve the best possible positive returns from investment. Most notably are the UN Sustainable development goals, which companies can use as a guideline to achieve sustainable business practices.
But why is it relevant? Motivation for using ESG includes long-term risk mitigation. Failure to adopt ESG will likely have material long-term implications for a company and its value. It has always been relevant.
We take the time to understand your values. During our needs assessment we will identify how important these issues are to you in the context of your investment approach.
At James Sharp we help align your own ethical values with a suitable investment for your financial needs.