Responsible Investing: 5 questions that you may have been too afraid to ask

Posted 29.06.2021

We are seeing a global trend towards responsible investing, but what does it actually mean and how does it relate to your financial portfolio?

Here are answers to five common questions that you may have been too afraid to ask:

What is responsible investing?

Responsible investment is an approach to investing that aims to incorporate ESG (environmental, social and governance) factors into investment decisions, to better manage risk and generate sustainable, long-term returns.

Does responsible investing mean greater or lesser returns?

Whilst there are no guarantees when investing and past performance is not a guide to future performance, evidence and research has shown that sustainable funds provided returns in line with comparable traditional funds. In fact, there is strong evidence to suggest that sustainable funds are more stable and can lead to higher returns.

Why do I need to invest responsibly?

There are several reasons why you might choose to invest responsibly. These might include personal values and beliefs around socio-economic issues such as climate change, how corporations conduct themselves and treat their employees, and indeed whether out of principle, you would want to invest in tobacco companies etc.

Choosing who and what you want to invest in often comes down to aligning your personal values with the investments you choose.

How can you tell if a company is socially responsible?

Your financial advisor will work with you to source the right investments products according to your personal values and financial goals.

Manager selection is critical, and we have a thorough process to help clients identify the sustainable funds that are driving lasting positive impact, whilst generating returns.

How can I start investing ethically?

The starting point is to review what companies and funds are available to you through investment portfolios, stocks and shares ISAs and personal pensions.

At Rhodes Wealth Management, our entire fund range meets high standards of responsible investing. The fund invests in a range of companies already well-positioned for the transition to a globalised sustainable world. We explore a company’s character to appraise how they manage ESG risks and plan for the future, and we conduct a thorough analysis of how a company combats emergent threats, and seeks competitive advantage.

We work closely with our clients to help decide which companies and funds match your personal values and we continue to evolve our service to provide a range of solutions specific to client needs, goals and beliefs.

 

The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested.