Investing for Good
In recent years people have started to want more from their investment in addition to growth. They want their money to improve the world.
2020 saw a rise in responsible investing. People are growing more concerned about investing with the right type of companies, ensuring that their portfolios did not invest in companies in values-based exclusions, such as the unconventional extraction of oil, gas and consumable fuels, metals, and minerals; weapons, tobacco, gambling, alcohol, or adult entertainment, to name a few.
Whilst people knew what they did not want to invest in they also knew what they did want to include, such as reducing climate change, reducing carbon footprints, pro-human rights and companies with good ethics and governance.
These types of investments are called Environmental, Social and Governance (ESG). Whilst this has been come more focused recently, especially with the current pandemic, it is not a new way of investing. The term ‘ESG’ first appeared 17 years ago in the Who Cares Wins - Connecting Financial Markets to a Changing World, published by the United Nations and Swiss Federal Department of Foreign Affairs and endorsed by over 20 financial institutions.
United Nations 2030 Agenda
In September 2015, the United Nations agreed on a list of universal and transformative goals and targets to achieve by 2030. These are to eradicate poverty and hunger, to combat inequalities within and among countries, to build peaceful and inclusive societies; to protect human rights and promote gender equality and the empowerment of women and girls; and to ensure the lasting protection of the planet and its natural resources. They resolve also to create conditions for sustainable, inclusive and sustained economic growth, shared prosperity and decent work for all, taking into account different levels of national development and capacities.
17 goals were put in place.
SG and Broom Consultants
There is over US$14 trillion invested in ESG in Europe and US$12 trillion in the United States.
Due to the different exclusions and inclusions of specific companies/activities, ESG is a very complex investment industry. It is based around a points system and each company is graded on how and what they trade and how they operate. However, this can lead to a company having a high ESG rating and still have a large involvement with carbon products, where as another company may have little or no involvement with carbon products and could have a lower ESG score. If carbon products is one of the areas you wanted to avoid, this can be very misleading.
Broom Consultants have spent a lot of time reaching this area of the marketplace and concluded that due to the constant need for monitoring and the variations involved in ESG portfolios we would appoint 2 ESG providers who have been in that industry for many years to provide our ESG complement to our existing portfolios.
You can find more on our chosen ESG Fund Managers on our website at: -
At Broom Consultants, we have started to invest in ESG within the last couple of months and currently have £2 million invested in ESG.
To show you what impact that this £2 million investment is having on the planet, see the image below.
f you are interested in learning more about ESG and would potentially like to use some of your funds for investing in this area, please contact us on 01277 202222 or email firstname.lastname@example.org