Investing in a socially responsible and ethical way is no longer niche; it is an intrinsic aspect of mainstream portfolio construction and for many investors it is a key focus that enables them to arrange investments that are aligned with their social and moral principles and the way they live their lives.

ESG is a recognised way of measuring the sustainability of companies from not just one ethical perspective, but 3 – Environmental, Social and Governance.

So, ESG investing involves researching and factoring in these Environmental, Social and Governance issues and can help to work out how big a part these principles will play in a company’s long term performance.

Here are some of the key factors that are given consideration in each area when assessing companies for potential investment:

Environmental – how a company impacts on the environment

  • Climate change impact
  • Air & water pollution
  • Transparency in meeting greenhouse gas emissions goals
  • Use of renewable energy – wind and solar for example
  • Relationship with environmental regulatory bodies

Social – how a company engages with its employees, clients and communities

  • Employee treatment – including working conditions, benefits and training
  • Gender equality policies – including diversity and inclusion
  • Human rights
  • Data security
  • Customer service responsiveness

Governance – how a company is managed

  • The board structure – including conflicts of interest and diversity
  • Management values designed to drive long term growth of the company
  • Financial reporting – timely and accurate
  • Business ethics and culture
  • Remuneration of executive employees – including bonus packages

Fogwill & Jones recognises the crucial role that the ESG philosophy plays in meeting our clients’ needs for socially responsible investment and we are very pleased to provide a suite of portfolio solutions to meet that need.

If you would like to discuss ESG investments or any other financial planning matter, please do not hesitate to contact us on 0114 2588899 or email margaret@fogwilljones.co.uk.  Our Independent Financial Advisers are qualified to provide advice in the areas of retirement planning, tax planning, savings, inheritance tax, investments and protection.

Source – Andrew Ball – Chartered Financial Planner

16.04.2020