Introduction to sustainable investing
Sustainable investing may help you build your wealth over the long term. Whether you want the means to buy your dream house, retire in luxury or give your grandchildren a better start in life, investing sustainably is one way you could achieve your long-term financial goals. This is about investing in progressive companies that are helping to solve the world’s biggest challenges, from global warming to social inequality, and recognising that such companies are perhaps the best positioned to thrive in the future.
Download our sustainable investing eBookWhat does it mean to invest sustainably?
Sustainable investing is an umbrella term for a wide range of investment activities, including socially responsible investing, impact investing, green investing and ethical investing. All of these investment approaches are focused on using your money to try and generate profit while also having an impact on ethical, social and environmental issues.
When you invest sustainably, you normally invest your money into a fund comprising different companies, selected because of their potential ability to generate long-term financial returns and for their positive impact on environmental or social issues. A fund is one of the most popular and easy ways to invest. They are an investment where many investors pool their monies and invest in different types of assets, including bonds, shares and property. Funds are run by a manager, who works on behalf of all investors to oversee the fund’s investment strategy and trading activities.
Sustainable fund managers will typically consider ESG factors when deciding how best to place investors’ cash. ESG stands for Environment, Social and Governance. Simply put, Environment considers a company's impact on the planet, Social considers a company’s impact on society, and Governance considers how a company is directed and managed.
Finding a sustainable fund (and there are a lot out there) that meets your own personal objectives and circumstances is the job of a financial adviser.
Why should you invest sustainably?
Sustainable investing helps you support the causes you care about, from fighting climate change to improving social mobility. You can dictate which problems you want to help tackle by considering the sectors and types of companies you want to support.
For example, you could be putting your money into organisations like Ford Motor Company, which is working hard to improve the environmental impact of the automotive industry. Or you could be supporting organisations such as Visa Inc, which is focused on driving financial inclusion for everyone everywhere.
That’s not to say that sustainable investing isn’t focused on making money. As with any form of investing, it’s about using your money to try and generate a profit.
Make an impact
There are also reasons to believe that sustainable organisations are primed to perform well in the future. This is due to a myriad of factors. For instance, sustainable businesses tend to have:
• a stronger competitive advantage
• increased customer loyalty
• reduced operational costs
• access to new growth opportunities
Changing consumer behaviours, government funding, energy waste reduction and better governance are just some of the reasons why established sustainable businesses are reaping these benefits. This points toward a bright future for such organisations, which gives us hope that sustainable investment funds may perform increasingly well in the future. But ultimately, in this volatile world, nothing is guaranteed.
How do you invest sustainably?
How you invest sustainably depends on your financial objectives and the strength of your values. If you have strong values, you can screen against ESG factors to make sure the funds you invest in are aligned to your moral beliefs.
You might use negative screening to do this, which can be used to exclude or avoid specific businesses and industries from your sustainable investment portfolio. For example, you could exclude one of the traditional “sin industries” such as tobacco or gambling.
Another approach is positive screening, which can be used to include businesses in your portfolio based on what you care about the most, such as fighting climate change. In which case, you would use positive screening to find companies with a low carbon footprint.
If your priority is to make a profit, sustainable investment funds may still be able to help you achieve your financial goals. Established sustainable businesses are successful now and are primed to be successful in the future . And you can also invest in sustainable funds alongside non-sustainable funds to hedge against other areas in the market that may not be doing well, helping you manage risk.
Of course, it’s important to remember that the value of an investment and the income from it could go down as well as up. The return at the end of the investment period isn’t guaranteed and you may get back less than your original investment.
Why use a financial adviser?
Starting your sustainable investment journey without a financial adviser is like completing a complicated divorce without a lawyer. The process requires many hours of in-depth research and a high level of technical expertise and experience.
At Chase de Vere, our independent advisers cut through the complexity of sustainable investing, helping you decide whether it‘s the right financial strategy to help you achieve your goals. They provide a highly proactive and responsive service that helps you:
• Understand what you want from sustainable investing
• Choose sustainable investment funds aligned with your goals
• Respond rapidly to market changes
• Protect you against greenwashing
• Build your wealth while igniting positive progress
Feel confident that your sustainable investments are being monitored and managed expertly. Along the way, build a rewarding relationship with your Chase de Vere financial adviser that can last across generations.
Our process
Understand priorities
We’ll help you identify what you want out of sustainable investing by asking you specific questions about your financial and ethical goals. This will help us define your investment style and the type of service you need.
Identify funds
We’ll spend time researching the best sustainable investment funds to go in your portfolio based on your preferences. Each fund undergoes regulatory and compliance checks for greenwashing.
Portfolio creation
Gain a sustainable investment portfolio containing best of breed funds. You can manage your portfolio as much or as little as you like depending on your service preferences.
Ongoing support
We can keep you updated on your portfolio’s performance via regular reports. Stay in the loop with essential information, including a current valuation, Performance Commentaries and Portfolio Change notifications.