It seems to me that anyone making investment decisions with an eye on future profit would base those decisions on the best information available and a vision of tomorrow.
In terms of choosing a holiday, as an example, there is an expectation that, if you want to ski you go where snow can reasonably be expected. That’s based on historical data, “snow is expected in the Alpes in winter because that’s what normally happens.
The vision might be that you want to return from holiday feeling fitter and healthier and so you choose a resort that offers a high level of cleanliness and hygiene, possibly with a well-equipped spa.
Increasingly the future vision is replacing some old certainties right across the investment world. No longer do the world’s biggest investment funds invest in carbon heavy industries, instead they look for the innovations that hold out a vision of the future, better recovery of water, clean energy and medical advances, to name just a few.
That is what is meant by sustainable or positive impact investments. They offer opportunities for future, long term profit.
No one ever came to me for advice and said they wanted to lose money!
They first and foremost want a good return for themselves and their loved ones.
We live in exciting but challenging times.
In this small country our money is losing its value, wage growth is not keeping up with inflation and the old industries are no longer profitable. The British are no longer able to spend, spend, spend. We are however blessed with an education system that keeps on providing us with world leading technical innovators. What our innovators often lack is the finance to develop their ideas.
How often, in the past, have we let other countries develop them because they have the capitalist to invest. The challenges of today are still being taken on by our innovators and it is up to my profession to bring the capital into the equation.
I never really thought of myself as a capitalist but recognise that, whether the capital comes from individuals, governments or Global business, that is what it takes to make good ideas work. Bringing together capital, innovators, regulations and good corporate governance can start to build a better society.
Clearly, I did not invent ESG or impact Investing but having started on the journey to exclude bad things from my investment portfolios in the mid-80s I am really delighted to see how the investment opportunities, to fit any individuals value system, are developing and broadening.
Here are a few comforting facts:
- 77% of people would be unlikely to donate to a charity if they found it had not properly aligned investment and mission
- in September 2017 pension regulator issued its ESG guidance – responsible investor requiring all pension trustees to take Ethical, Social and Governance issues seriously when allocating investments.
- global collaboration the GSIA, Global Sustainable Investment Alliance, is the alliance of SIF from the UK Europe, the United States Australia and the Netherlands.
The mission is to deepen the impact and visibility of sustainable investment organisations at global level
- in 2015 the United Nations summit in Paris developed 17 sustainable development goals seen to address was challenging challenges faced by the world though 17 sustainable development goals include
I believe that good outcomes are increasingly achievable and quantifiable and at the same time there is an increasing awareness among society of the need to do things differently.
We are now a long way away from the days of investing without question; prepared to trust the institutions, firms and banks, to make money for us without knowing what they are using our money for.
It is just plain common sense that we invest sustainably in commodities and firms that are not going to be fined for abusing their workforce, the environment or local communities.