For some of our clients, socially responsible investing is an important consideration when implementing a strategy. As a concept, socially responsible investing has been around for a long time, but with limited options for clients. In recent years, however, it has become more popular with investors and, as such, we are seeing more commitment from fund managers and more options available to retail investors, including non-residents. ESG investing encompasses environmental, social, and governance factors when selecting or de-selecting companies in which to invest. Research in these areas is far greater than before, and publicly listed companies looking to attract investment are including ESG factors as part of their corporate goals. These are positive ways investors can encourage companies to change behaviors.
At this time, there is no consistent standard across our industry as to what factors a fund may apply to the investment process to call itself ‘ESG’. As such it is vital we look under the hood (bonnet), to understand the research process undertaken by any funds we recommend. If this is an area of interest we will spend time at the outset of the process to explain this style of investing and options available to you.