Socially-responsible investing – ESG and impact investing

The experts from independent financial planning and mortgage management firm RobMac share their thoughts on socially-responsible investing.

AT ROBMAC, we receive a lot of enquiries about socially-responsible investments and whether we are able to prepare appropriate portfolios either on a standard or tailored basis.  These types of investment are sometimes referred to as environmental, social and governance issues or ESG for short.

In order to do this, we will usually have a detailed discussion and then choose appropriate funds, which rule out certain industrial sectors such as tobacco, armaments, pornography, animal testing and so-called “dirty” industries such as fossil fuels, which may cause pollution.

But is this doing enough to meet the needs of a developing world and rapidly-growing populations?

In the past few years, we have become increasingly steered towards positive change investing, sometimes known as “impact investing”. This approach sets out to provide attractive long-term capital returns while at the same time making positive change towards a more sustainable and inclusive world.

The strategy invests in high-quality growth companies that can deliver positive social change in one of four areas:

  1. Social inclusion and education;
  2. Environment and resource needs;
  3. Healthcare and quality of life;
  4. “Base of the pyramid” – addressing the needs of the world’s poorest people.

At RobMac, we believe that this is a trend that will gather momentum given the changes that are taking place around us. In particular, the next generation are more concerned about these issue and will make it part of their investment decision making process.

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