When Sir David Attenborough recently returned to our screens with A Life on Our Planet – his witness statement to the world – he stressed the way we collectively invest our pensions is “jeopardising the future that we are saving for”.
In a year that is set to be one of the warmest on record, his words will only strengthen the view that money needs to both earn a return and be a force for good. The investment industry is listening, and progress is gradually being made. Companies are also starting to wake up to the idea that they may have a better chance of long-term success and profitability if they adopt sustainable business practices.
Responsible investing isn’t just about the environment, of course. The COVID-19 crisis has turned our attention towards corporate behaviours – both good and bad – and helped illustrate why successful businesses are often those that care about their people, their supply chains and their community.
A re-examination of our relationship with the planet and society is a reason why more of us are allocating our savings to sustainable investments and choosing funds that look at ESG
(environmental, social and governance) factors in their investment processes. A recent survey by The Investment Association found 38% of total UK assets integrate ESG into the investment process, up from 26% in 2019. 1
Whether ESG funds will outperform over the next 10 or 20 years is hotly debated. Nevertheless, several studies show that companies with good ESG management tend to be more profitable over the long-term. They are also better prepared for sudden crises than companies that do not follow a sustainable governance approach.
Of course, many people will be just as interested in the non-financial benefits that responsible investing can deliver. Research from Nordea shows that our savings can have 27 times more impact on our personal carbon footprint when invested sustainably than other reduction activities like flying less, eating less red meat and shortening our showers. 2
The Principles for Responsible Investment (PRI) is a global leader in promoting standards of responsible investment, supported by the United Nations. The group encourages asset owners and managers to use responsible investment to better manage risks and seek opportunities, in the pursuit of long-term value in sustainable markets.
Adopting these principles is an important step for wealth managers and fund managers. St. James’s Place became a signatory of the PRI in 2018.
“We are passionate about helping our clients achieve financial wellbeing in a world worth living in. We joined the PRI to ensure our responsible investment beliefs are aligned with the global standard,” says Robert Gardner, Director of Investment Management at St. James’s Place.
In January, St. James’s Place set a clear minimum standard to ensure all its 39 external fund managers would be signatories to the PRI by the end of 2020.
“We are proud that 100% of our managers are now signatories of PRI, signalling their commitment to integrating responsible investment into their decision-making and reporting,” notes Gardner.
“Our fund managers invest over £118 billion of our clients’ assets across global markets. We believe it is crucial our fund managers embed the principles and standards set out by the PRI, as a minimum standard, to ensure they are investing in the long-term interests of our clients,” Gardner concludes.
It is evident that our savings don’t have to jeopardise the future. Our investments can shape a future that protects the world we inherited, rather than endanger it.
To receive a complimentary guide covering Wealth Management, Retirement Planning or Inheritance Tax Planning, produced by St. James’s Place Wealth Management, contact Nick Jones on 01743 240968, by email nick.jones@sjpp.co.uk or visit www.njwealthplanning.co.uk
The Partner Practice is an Appointed Representative of and represents only St. James’s Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the Group’s wealth management products and services, more details of which are set out on the Group’s website www.sjp.co.uk/products. The title ‘Partner Practice’ is the marketing term used to describe St. James’s Place representatives.
The value of an investment with St. James's Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.
1 Investment Management in the UK 2019–2020, The Investment Association
2 Nordea Asset Management, 2017
