Producing a positive outcome for society
Responsible Investing is growing in popularity as investors seek to know their capital is working to produce a positive outcome for society.
Responsible Investing captures a range of investment approaches. These can be described in a 'spectrum of capital', and as the investor moves along the spectrum, the approaches used become more focused on positive change.
- Responsible: Mitigate risky environmental, social, and governance practices. Typically this means excluding sectors or companies whose activities are deemed harmful. For example, tobacco or fossil fuels.
- Sustainable: Building upon the 'responsible' approach, this approach will focus on companies who are addressing a sustainability issue faced. This might be resource efficiency, or waste management, for example.
- Impact: Adding further to the sustainable approach, impact investing requires a positive impact in some way. Impact investing must also be identifiable, and measurable, so investors can see how their capital has made a difference.
We take a pragmatic approach to Responsible Investing, and look for investments to use more than just an exclusionary screen. We want the managers to take their own view on the credentials of a security. As with our traditional security selection, we blend approaches from those that focus on only best in class to those that consider companies whose ESG ("Environmental, Social, and Governance") score is rapidly improving and where the market has not appreciated their commitment to change. This means that as with our traditional investment approach, a typical Responsible Portfolio is made up of a range of styles, from sustainable through to impact investing. Our Responsible Approach can be applied to the whole or a part of an investment portfolio.
UN Principles for Responsible Investing (UN PRI)
In 2020, we signed up to the UN PRI, which requires us to consider ESG factors into investment decision making and we expect the investments that we use to similarly consider them. Consideration of all stakeholders to create a responsible future is a critical part of the investment process. For more information visit www.unpri.org
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