Today, it’s more widely accepted that companies which operate well do better. In particular, research is showing that business results are directly influenced by the way in which companies tackle environmental, social and governance (ESG) issues. So, when it comes to investing, taking ESG factors into account, and weaving an ESG integration approach into your investments, has the potential to deliver a more robust portfolio.
ESG integration defined
Operating ethically and sustainably is now a key target for companies. In fact, tackling ESG is becoming a much more common aspect of business strategy, and companies today understand that they must begin to embed the practice into their operations to keep themselves from falling behind.
ESG integration means incorporating your own set of values into your investment decisions. You can then be sure that you are investing in companies which are aligned to your values, and which operate in a way you support.
Dos and don’ts of ESG integration
When it comes to integrating ESG into your investment portfolio there are some key dos and don’ts which it can be useful to consider.
- Take time to consider your own values and drivers
- Decide on the areas or sectors you’re comfortable investing in
- Choose where you want to avoid investing in completely
- Speak to a qualified financial adviser
- Create a strategy which echoes your ethical concerns
- Remember to review and refine your strategy on a regular basis, and in line with your values
- Consider ESG exclusively and above all other factors; it’s important to take your personal circumstances into account just as with any other investment strategy
- Expect returns to outperform the market; ESG has had a strong period recently, but it doesn’t mean it will continue, especially given that ESG will become a more normal and expected element of every company’s strategy
- Compromise on your values and drivers in the pursuit of financial goals if you don’t want to; for you it may be about the balance of ‘doing good by doing good’
ESG integration with The Fry Group
There are a range of considerations when it comes to ESG integration. You will have preferences when it comes to strategies, companies, asset classes and sectors to include or avoid, as well as your own attitude to risk. Our advisers will take time to understand this and review relevant investment options and fund managers, using data and insights to stay well informed. Just as happens with other information sources, ESG investing will be an area which our advisers carefully scrutinise when it comes to helping you build a robust investment portfolio.
Our team of advisers have excellent experience of ESG integration. A number already hold the CFA Certificate in ESG Investing and many are studying towards it. This is the first certificate of its kind in the UK, and qualifies them to integrate environmental, social and governance factors into the investment process.
To discuss your own portfolio, and any aspect of ESG integration, please contact your nearest office.
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We are here to help with your financial planning requirements. For more information, whatever your circumstances, please contact us today.