Investing for a Better Tomorrow

It has been a while between posts. Not because there hasn’t been much happening in world of responsible, ethical and impact investing – quite the opposite. This last 12 to 18 months has seen an enormous shift in the approach and attitudes of investors, asset managers and advisers. Consumers are making more sustainable choices. And with a few notable exceptions, governments around the world are setting net zero targets and taking action.

So, an end of year resolution of sorts. A return to more regular sharing of news, ideas and stories to help you invest for a better tomorrow. Here are just a few recent happenings that caught my eye:

  • Recently UBS announced that it would become the first major financial manager to choose sustainable investment portfolios over traditional portfolios – for all private clients globally. And they made a significant reference to returns:

“UBS believes a 100% sustainable portfolio can deliver similar or potentially higher returns compared to traditional investment portfolios” 

UBS Group AG and UBS AG Announcement 10 Sep 2020
  • Sustainable funds in the US have attracted record inflows in 2020. According to Morningstar, last year’s total of $21.4B was surpassed by July this year. And the 2019 inflows were 4 times the total of the previous year. There is serious momentum behind this shift in capital. For investors, it’s becoming more important than ever to look closely at the strategies being employed by funds, make sure they are true to label and actually delivering sustainable outcomes.

  • Increasing financial advisers are realising they need to start talking to their client’s about ethical and sustainable investing. And rather than waiting for the client to ask about it, more advisers are getting on the front and asking clients about their preferences on:
    • negative issues like fossil fuels, tobacco, gambling and;
    • positive/sustainability issues such as energy, food, water or transport.

Education in sustainability issues is key area of improvement needed in advice. I joined a panel at this year’s Financial Planning Association virtual Congress. We spoke to over 400 advisers on the topic: Will sustainable/impact/ethical investing be more relevant in a post COVID-19 world?

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