Ethical Investing

Ethical investing has the potential to change the world and make it a cleaner, fairer place.

It brings together a variety of philosophies and approaches to investing that target specific ethical outcomes based on people’s differing views.

Some investments aim to exclude companies in sectors considered unethical such as animal testing and weapons manufacture. Others seek to include companies making a difference. e.g. fossil fuel companies investing heavily in renewable alternatives.

To achieve the required outcomes, ethical investing applies a ‘screening’ processes to choose suitable companies for including in a portfolio or fund.

Funds or Portfolios are created to include ethically screened company shares and other suitable investments, such as Government bonds and property (and even shares in other funds) that also meet the ethical screening criteria.

This makes for a diverse range of investment options suitable for conscientious investors like you.

Ethical Investing

Ethical screening methods include; ESG (Environmental, Social, Governance), SRI (Socially Responsible Investing – negative & positive screening) and Impact Investing to name a few.

Your Ethical Investing Choices:

There is no need for you to choose individual stocks & shares for your ethical portfolio.

Platform Choice

A platform is a technology solution giving access to a selection of funds making it easy for you to consolidate your investments and produce reports at regular intervals.

With an award winning platform you get access to a choice of 4 different ethical strategies each with 10 risk-rated portfolios (total of 40 portfolios) to choose from. Each addressing a range of ethical standards and preferences.

Life Office Choice

A number of life insurance companies offer their own ethical funds to choose from.

Discretionary Fund Manager Choice

For larger sized investments it is possible to have a completely bespoke portfolio created just for you by a choice of prestigious investment managers.

Platform Choice – Portfolio Options.

A platform is a technology solution giving access to a selection of funds making it easy for you to consolidate your investments and produce reports at regular intervals.

Available through our Platform Solution are 4 pre-set ethical profiles (labelled A-D). Collectively they aim to offer a cross-section of the entire regulated ethical market.

The profiles are ethically graded with the more positively orientated options (with wider investment remits) being A & B and the options with the highest level of ethical screening (and avoidance) are C & D.

Within each of the 4 profiles there are 10 risk graded portfolios (1-10) available to align with your individual tolerance for risk and capacity for loss.

Ethical Profile A – Responsible Leaders

This portfolio invests in a range of funds which aim to identify investment opportunities within companies that take a responsible approach to a wide range of environmental, social and governance issues. This portfolio has a positive bias with a limited emphasis on exclusionary criteria.

Permissible investments include managed liquidity, government bonds and property for the purpose of diversification, however the majority of the portfolio will be invested in corporate bonds and equities.

Investment focus:

  • Focuses on companies that take a responsible approach to a wide range of environmental, social and governance issues.
  • Aims to encourage positive company behaviour through engagement with senior management and responsible voting practices.
  • No specific negative screens but funds selected are likely to be underweight in the specific areas as a result of their more positively orientated approach.

Limits exposure to:

  • Armaments
  • Pornography production
  • Animal testing (non-medical)
  • Human rights abuse
  • Tobacco production

Ethical Profile B – Sustainability Leaders

This portfolio invests in a wide range of funds which aim to identify investment opportunities within companies that help us move towards more sustainable lifestyles. Their products and services help reduce the impact our lifestyles have on the environment and society. This portfolio has a positive bias with a limited emphasis on exclusionary criteria.

Permissible investments include managed liquidity and property for the purpose of diversification, however the majority of the portfolio will be invested in corporate bonds and equities.

Investment focus:

  • Focuses on companies that offer products and services that help reduce the impact that our lifestyles have on the environment and society
  • Aims to support companies with leading sustainability practices and may encourage improved behaviour through engagement with senior management and responsible voting practices.
  • No specific negative screens but funds selected are likely to be underweight in the specified areas as a result of their more positively orientated approach.

Limits exposure to:

  • Armaments
  • Pornography production
  • Animal testing (non-medical)
  • Human rights abuse
  • Tobacco production
  • Environmental damage

Ethical Profile C – Ethical Leaders

This portfolio invests in a range of funds which aim to balance positive investment opportunities with a keen awareness of ethical concerns. A disciplined exclusionary policy will be applied to stock selection in keeping with the ethical criteria specified below.

Permissible investments include managed liquidity within the lower risk portfolios, however the majority of the portfolio will be invested in corporate bonds and equities.

Investment focus:

  • Aims to balance the ‘pros and cons’ of investment opportunities and select only those which are considered to meet stringent ethical criteria.
  • May encourage positive company behaviour through engagement with senior management and responsible voting practices wherever possible.
  • Included funds must meet specified avoidance criteria.

Aims to AVOID

  • Armaments
  • Pornography production
  • Animal testing (non-medical)
  • Human rights abuse
  • Tobacco production
  • Environmental damage
  • Gambling

Ethical Profile D – Traditional Ethical Leaders

This portfolio invests in a wide range of funds with a strict avoidance based strategy and will only invest in funds that clearly meet the portfolios screening policies. There may be some positive investment policies adopted but the emphasis is primarily placed on avoidance.

Permissible investments include managed liquidity within the lower risk portfolios, however the majority of the portfolio will be invested in corporate bonds and equities.

Investment focus:

  • Strict avoidance based strategy
  • May encourage positive company behaviour through engagement with senior management and responsible voting practices, wherever possible.
  • Included funds must meet an extensive range of specified avoidance criteria.

Aims to AVOID

  • Armaments
  • Pornography production
  • Animal testing (non-medical)
  • Human rights abuse
  • Tobacco production
  • Environmental damage
  • Gambling
  • Alcohol production
  • Nuclear power

Investments in Ethical Profiles A & B focus on leaders in positive change while investments in profiles C & D are more focused on specific avoidance criteria.

Life Office Choice

Many well known life insurance companies have ethical funds among their available investment offerings which, can target specific outcomes.

The Legal & General Investment Management (LGIM) ‘Future World Fund’ is described as ‘a new solution designed for pension funds and investors looking for an alternative to a traditional index strategy, while also addressing the long-term financial risks of climate change’.

The aim is to reduce risks from future climate policy and technology changes and invest in companies that support a low-carbon approach.

LGIM looks after over £900 Billion and are one of the world’s largest asset managers which, makes it possible for them to influence companies they choose to invest in and bring about positive change.

Royal London also have a range of funds shaped by social, environmental and other ethical parameters Their ‘Sustainable Leaders Fund’ has an emphasis on investing in companies who can demonstrate strong environmental, social and governance (ESG) management.

Having determined your ethical profile we can establish if any of the offerings available via the life office option can meet your requirements.

The life office option may also benefit from lower annual management charges compared to the Platform choice.

Discretionary Fund Manager Choice

Discretionary fund management is a form of investment management where decisions are made by the fund manager on the client’s behalf.

It is considered “discretionary” because investment decisions are made at the fund manager’s discretion.

This requires a certain degree of trust and so clients are encouraged to meet with their fund manager to understand the process and how their desired outcome will be achieved.

We offer access to a hand picked selection of prestigious, London based discretionary fund managers able to build a portfolio just for you and we encourage a face to face meeting to discuss your objectives.

Discretionary fund management is generally only offered to high net worth clients who have in excess of £300,000 to invest.

Contact us if you would like to find out more.