Profit With Purpose

Date Published: May 2018 (5 Min Read)

Why Sustainable Investing Matters

Sustainable investment is increasingly becoming a focal point for many investors and fund managers. The term sustainable is fairly new and bands together a raft of familiar factors like impact, ethical and Environmental, Social and Governance (ESG) investing. The interpretation of these factors varies greatly between investors; some wish to invest in clean water, while others want to avoid oil.

In 2015 the UN Sustainable Development Goals were adopted by world leaders. The themes are universal and include tackling climate change and inequality. Then in September 2017 the UK government[1] established a taskforce to accelerate the growth of green finance and the UK’s low carbon economy which has led to support for sustainable projects and infrastructure.

At Gore Browne Investment Management we believe this has helped the investment industry to see the opportunity. This year a marked number of fund houses have been incorporating sustainable practices into their corporate and investment processes. Sustainable investing still has its challenges however the message is getting simpler. An investor can now have a sustainable portfolio without it being invested in a very restricted market, as was the case historically.

Is sustainable investing really new or is it a new label for what came before? Investing in a well managed company which focuses on the longer term by putting in place good management and policies is not new. However, increasingly investors believe in being robust about transparency, having a low carbon footprint, and enhancing potential through innovation and equality.

The theory is to take the best of what investment managers have always done and to blend it with a growing awareness of social consciousness.

Making every pound count or the concept of compound returns is understood well by investors. In the case of sustainability the effect is as much about impact as it is about financial returns. Many people believe that achieving both is better.