It’s time to change the way we invest. Investors are increasingly aware of the impact that their decisions can have on our society and environment, and are looking for more than just a financial return on their investments. As a result, they now want more control over how their beliefs are represented through their investments.
In a recent survey*, 74% of people said they would value a conversation with their financial adviser about responsible investment.
* Boring Money (2019) ESG investing – the retail appetite
What is responsible investment?
Broadly speaking, responsible investment is a strategy or practice to incorporate environmental, social and governance (ESG) factors into investment decisions. Responsible investment covers a range of different approaches and aims.
What are ‘ESG’ factors?
ESG is the term used by the investment industry to describe and categorise the big world issues, such as climate change. When contemplating responsible investment, many of us initially think of environmental factors, but these only constitute the `E’ of ESG. In fact, there are lots of other factors to consider which provide both risks and opportunities for investors:
Different approaches to responsible investment
There are several different approaches fund managers and financial advisers can take to incorporate ESG issues into their investment decision making process when managing or giving advice in respect of responsible investments.
Here are some examples of different elements that could be used on their own or in combination.
Speak to an AAM Advisory wealth manager about your attitude to responsible investing. Together you’ll be able to formulate a personalised plan so your preferences can be taken into account, alongside your risk appetite and financial goals.
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