Sustainable Investing - The Greener Way, With Alex Barnes
Sustainable Investing - The Greener Way
With Alex Barnes, Managing Director at A J Barnes Financial
The potential to increase your wealth and saving the planet at the same time - sounds too good to be true? Sustainable investing is a hot topic of late and we wanted to know if it's really possible to achieve good returns when investing in companies that strive to protect and preserve planet earth. Here, Alex outlines the principles behind sustainable investing and whether it's something to consider when looking to maximise your own fortune.
Ethical investing, ESG investing, sustainable investing, impact investing. The explosion of these terms muddies the water but put simply, they all fit under the umbrella of ‘responsible investing’. In a world where the climate change debate is being headed up by an inspirational, plain speaking 16-year-old by the name of Greta Thunberg the world of investing has certainly began its awakening into the issues being faced by our planet and its inhabitants. At A J Barnes Financial, expectations have changed and we always move with the times. People now, more than ever, want to understand more about their investments and where their money is going.
In Nordea’s 2018 Sustainable Finance Team report it was highlighted that by simply changing your investment strategy you can improve your personal carbon footprint up to 27 times more efficient than other lifestyle changes such as reducing international flights, reducing your weekly meat consumption and taking the train instead of the car.
Our role is to help clients build a better understanding of where they are currently putting their investments and pension funds by shining a light on this as part of their finances, so having an open discussion around a desired approach to investment is the first step to this. With all clients our initial discussion gauges opinions on the more typical investment issues such as risk vs reward and investment experience but we then explore their thoughts towards the investment’s sustainability and its importance to them. This can, of course, take a number of forms ranging from climate action, reducing inequalities to corporate governance. By taking stock of the clients current situation and seeing if this fits their expectations, we can then alter accordingly the course if necessary. It is our central belief that our clients’ investments are more likely to prosper if we have sustainable, robust and thriving economies, markets and societies. Therefore, we take these issues seriously by integrating a greater awareness of these factors into our approach.
Whether you are a “Baby Boomer”, “Generation X”, “Millennial” or “Gen Z” our world is changing and so are investments. The growth in responsible investing strategies – those which include the integration of environmental, social and governance (ESG) factors into investment processes and decision-making – has been one of the most important recent trends in investment management and now accounts for $20 trillion – around 25% of all professionally-managed assets as per Saint James’s Place Responsible Investment Committee Annual Report 2018. Furthermore, in a recent 2015 Nielsen study it was found 66% of people were willing to pay more for sustainable goods. So, with investment in companies taking responsible steps making sense - change might happen sooner than we think. We hope.
“Change will not come if we wait for some other person, or if we wait for some other time. We are the ones we've been waiting for. We are the change that we seek.”
― Barack Obama
The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.
A J Barnes Financial Planning Ltd is an Appointed Representative of and represents only St. James's Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the group's wealth management products and services, more details of which are set out on the group's website www.sjp.co.uk/products. The 'St. James's Place Partnership' and the titles 'Partner' and 'Partner Practice' are marketing terms used to describe St. James's Place representatives.