Barnes Gladman, Financial Designer with Anstee & Co.

Socially Responsible Investments is the second in a series of three articles.

The COVID19 pandemic created challenges and heightened issues for leaders around the world. No country was spared from the economic, educational or security crises that followed. Decreasing job security alongside the strain placed upon healthcare systems and schools, has caused rising levels of inequality. Governments, organisations, and individuals have increasing responsibility for addressing these challenges and promoting shared prosperity.

In the last 18 months, there has been a huge influx of investment into “socially responsible” strategies. It is no coincidence this runs parallel to a global pandemic, reports of worldwide climate emergency and lights being shone upon social injustice and inequality.

The term “ESG” has become hugely more prominent in recent times and is defined as the consideration of Environmental, Social and Governance factors alongside traditional financial elements in investment decision-making. However, what does investing in these areas truly mean?

Socially Responsible Investments: The ‘S’ in ESG.

How can companies best manage their relationships within the societies in which they operate, the political environment, and their workforces?

Investment centred around human rights, equality, and diversity. The primary focus is on companies in their communities; the recruitment and development of individuals, along with the labour rights they uphold. This is combined with the enhancement of the safety and wellbeing of employees, whilst a secondary consideration is the standards companies demand and expect of their suppliers.

A global leader in ESG management specifically seeks four main criteria with regards to social investments:

• Companies that operate an ethical supply chain
• Supports LGTBQ rights and encourages diversity
• Has policies to protect against sexual misconduct
• Pays fair wages

One-way managers look to add socially responsible assets to a portfolio is through Impact Investing; investment made into organisations, companies, and funds with the intention of generating a measurable, positive social impact, alongside financial returns. Does the company contribute to a better future? Is the business run for the long term? And is the stock a good investment?

Impact investing can be broken down into four core pillars:

• Intentional – where there is evidence of intent on behalf of a company, to solve social challenges.
• Measurable – the need and ability to measure the social outcomes for people.
• Material – products and services to functionally contribute to solving social problems.
• Sustainable – the management of companies with all stakeholders in mind.

An example of a holding that meets these criteria is Hindustan Unilever (HU), a subsidiary of UK-listed Unilever and currently India’s largest consumer goods business. In India, on average 166 children under the age of 5 die every day, from diarrhoea caused by poor sanitation and dirty water. Hindustan Unilever has launched an educational programme, with the goal of teaching people the importance of clean water and good sanitation. HU hopes to save thousands of lives through the initiative, whilst also creating further demand for hygiene products they can provide.

Further examples of Social Investing include:

Bank Rakyat,

The largest financial services provider in Indonesia where approximately 50% of the adult population remains unbanked. BR plan to improve access to, and use of, financial services to historically underserved populations, and rural communities.

Everbridge

A technology software company with a platform used by hospitals, organisations and governments that allows them to accelerate their responses to unexpected events. In doing so, reducing the harm of disasters on human life and company operations, keeping people safe and businesses on track.

The Gym Group

The UK’s second-largest and lowest cost gym. The group promotes physical activity at less than half the price of traditional gyms, helping deliver affordable, positive public health outcomes.

At a time when COVID19 has severely affected, and in some cases reversed, decades of progress in some of the world’s most complex places; increasing conflict, political unrest, food insecurity and general vulnerability, it has perhaps never been more important to consider the social impacts of our actions and investments.

Is ESG investing right for you?

If you want to reach your financial goals, whilst also considering your impact on society and sustainability, then socially responsible investments may be the perfect fit for achieving your objectives.

How Anstee & Co can help you with Socially Responsible Investments.

If you would like to find out more about investments in line with your ethical view, then why not contact Barnes to find out more. The initial meeting is at our expense and is without obligation. As Independent Financial Advisers (IFA’s), the financial advice we offer is unbiased. Our experience covers all aspects of financial planning, including pensions, estate planning, mortgages and investments.

Our offices are located at-

• Kettering, Northamptonshire
• Stamford, Lincolnshire
• Towcester, Northamptonshire
• London, Greater London

We make full use of video conferencing facilities such as-

• Zoom
• Microsoft Teams
• Skype
• Facetime

Additionally, we can also arrange a conference telephone call. There is no need to visit an office as all work can be handled remotely.

So, if you have any thoughts or comments on this article, “Social Responsible Investments. What are they?”, then we would love to hear your thoughts.

Finally, the information contained in this article is for information purposes only and does not constitute advice. No action should be taken based on this information alone. Anstee & Co. is authorised and regulated by the Financial Conduct Authority (FCA).