Ethical Investing

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

It brings together a variety of methods and approaches to investing that target specific ethical outcomes.

Some methods aim to completely exclude sectors considered unethical such as fossil fuels, animal testing and weapons manufacture. Others methods will scrutinise existing companies and include those that are transitioning to become more sustainable. Other methods will only include companies aiming to solve the many problems jeopardising the future of life on Earth.

Ethical investing approaches apply a ‘screening’ processes to choose suitable companies for inclusion in a portfolio or fund.

The 3 most well known ethical investment approaches are:

1/ SRI – Socially Responsible Investing. A more traditional method that excludes unwanted sectors such as fossil fuels, weapons etc.

2/ ESG – Environmental, Social, Governance. A growing, more modern method for screening companies based on their environmental impact, treatment of staff and transparency of management. ESG has become more popular with the ability to gather and share detailed information about a companies use of resources, waste management, HR practices and quality of the management process.

3/ Impact Investing – choosing only to invest in companies working to solve the problems faced by humanity and the planet eg. sustainable farming, healthcare, renewable energy.

Ethical Investing

Your Ethical Investing Choices:

We provide regulated financial advice which requires a level of diligence that ensures your protection and the provision of appropriate advice.

It requires gathering detailed information, thorough research and a tailored recommendation.

Initial appointments and basic investment reviews are free and our research will help identify an appropriate solution from a range of investment choices.

We are independent which allows us to select a suitable solution from the entire range of available, regulated offerings.

For most clients there is no need to choose individual company stocks & shares to build an ethical portfolio but the option exists for large investments.

Many well established, award winning funds already exist and are run by expert fund managers with a proven track record of delivering performance combined with admirable ethical credentials.

Funds and portfolios are available from a wide range of providers and can be held directly with the provider, the fund manager or on a ‘platform’.

Platform Choice

A platform is a technology solution with online access giving access to a generous range of funds and ‘model’ portfolios making it easy for you to consolidate your investments in one place and produce reports at regular intervals.

Pensions, ISAs and other ‘wrappers’ can be created on a platform and then appropriate funds can be placed within these.

Life Office Choice

Many well known life insurance companies offer their own ethical funds to choose from. Some of these can be invested in directly with the insurance company and some are only available via Platforms.

Discretionary Fund Manager Choice

For larger sized investments it is possible to have a completely bespoke ethical portfolio created just for you by a choice of respected fund 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.

As well as the ability to source from a complete range of funds we also have access to 4 award winning pre-set ethical profiles (labelled below as 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 £200,000 to invest.

Contact us if you would like to find out more.