As a growing number of advisers, pension funds and insurers start to award new business exclusively to asset managers with a responsible focus, we review how to make responsible investing work the way investors want it to
Why do people invest? The answer, at least traditionally, seems obvious. To make money. There are various nuances. Generating a quick return, saving for retirement, getting better rates than merely holding cash. The primary objective, however, is profit.
Many of the highest yielding investments have focused on industries and companies that don’t necessarily ‘do good’ in the world. From health-damaging tobacco firms to environment-harming oil companies, many of the best returns seemingly come at a cost to society.
However, an increasing amount of people are demanding more from their money. Not just profit, but also purpose. No longer are people merely happy to hand over their savings to an investment manager and turn a blind eye to the types of companies being invested in. They want to know that their investments are being used for good or at least do no harm.
Advisers are now recommending funds to their clients that specifically focus on responsible investing, while large pension funds and insurers are taking a similar approach. No longer is sustainable investing seen as mere green window-dressing to a wider investment portfolio. It’s taking centre-stage.
To find out more about sustainable investing, click here to read Architas and Professional Adviser’s guide, ‘The Value of Values’