Introduction

Quite naturally, every investor wants to put their money into a fund that returns a profit. But, despite this, an increasing number of investors are choosing not to invest in particular companies or industries due to their activities or conduct. There are a variety of reasons for this but, invariably, it’s because a particular organization is involved in something that goes against the investor’s personal beliefs. Typical examples of this include organizations who are doing something considered detrimental to the environment; are believed to be socially irresponsible; have ethically indefensible ways of working or are thought to ignore or pay lip-service to corporate governance rules.

Over the last century an investment strategy known as ‘socially responsible investment’, often referred to as simply ‘SRI’, emerged to satisfy what have been viewed as the ‘specialist needs’ of some investors.

Investors embracing SRI as a strategy first apply ‘moral criteria’ to potential funds, carefully screening the organizations within them and disregarding those that contain organizations whose activities and conduct fail to match their personal views or beliefs. Only then, having screened the funds, do they apply their chosen financial criteria to decide which of the remaining funds best meet their objectives.

During the last twenty-or-so years, fears about climate change and the environment have caused the strategy to evolve from purely ‘socially responsible investment’ to a broader ‘sustainable and responsible investment’, at the same time moving it centre-stage, into mainstream investment. In many ways it’s ‘SRI plus’ as, although social, ethical and governance related issues still feature heavily, its key component relates, not unsurprisingly, to investment in ‘only those funds that positively support environmental issues’. As with SRI, sustainable and responsible investment does not initially consider the financial performance of a fund: its primary concern is the fund’s attitude towards environmental and green issues, social and ethical responsibility and corporate governance.

Despite the two strategies being dissimilar, they both share the same abbreviation – ‘SRI’ – which can cause confusion. To avoid this, we, One Financial Solutions, refer to these ‘value-led’ investment concepts under the general heading of ‘sustainable and responsible investment’. This is partly because it includes the word ‘sustainable’, and partly because, in the UK, it’s the more frequently-used term.
 

How can One Financial Solutions help you?

Every investor wants to put their money into a fund that will return a profit, but a growing number consider their own personal values to be equal to, if not more important than profit alone.

Deciding to use ‘sustainable and responsible investment’ as a value-led investment strategy adds an additional layer of complexity to choosing an investment fund as, of course, information about the fund’s environmental, social, ethical and governance credentials need to be considered.

One Financial Solutions is here to help you. We can explain how it works and, with access to information that will allow you to decide exactly which of the various sub-strategies and funds best meet your values, make it a very straightforward process.

So, if you’d like to know more about ‘value-led’ investment strategies as a method of investment, please call us on 020 3714 9565, or ask us to call you by sending an email to admin@onefinancialsolutions.co.uk.