Nutmeg shifts focus to ESG investing

Nutmeg shifts focus to ESG investing

Nutmeg has announced it is to provide environmental, social and governance scores for its entire investment range, while launching a range of ESG portfolios.

From today (November 20), all Nutmeg portfolios will show a range of scores, calculated using independent data points from MSCI, a provider of ESG data and analytics.

The scores give investors a picture of how each portfolio ranks for environmental, social, and governance principles, covering issues such as corporate tax being paid, measures implemented to guard against corruptions in the supply chain, and what’s being done to limit the carbon footprint.  

This comes as the company launched 10 fully managed, globally diversified, socially responsible portfolios. 

Shaun Port, chief investment officer, Nutmeg, said: "Whether it’s ethical, green, sustainable, ESG, or socially responsible, it isn’t always clear what these labels mean for investments, or investors.

"For too long many investments have hidden behind these terms without defining the purpose they are serving. There’s very little information for people who want to know if their investments are in line with their values; be they reducing carbon emissions, gender equality on boards or a business’ management of their data. We’re changing that."

He added: "Hard as we may try, no investment portfolio can be designed to dodge every controversy, but we’re committed to improving choice in the investment world, being transparent about how sustainable our portfolios are and empowering investors to decide what’s right for them."

Nutmeg's investment team will continuously score every portfolio to ensure customers understand the impact their investments are having and how well their portfolio aligns with their values.  

Nutmeg is currently one of a handful of UK wealth managers that have signed up to the Principles of Responsible Investment (PRI).

Supported by the United Nations, the PRI is an independent organisation that works to understand the investment implications of ESG factors.  

Eric Moen, managing director of MSCI ESG research, said: "We are happy to be working with Nutmeg, to respond to growing demand from retail investors for more transparency and reporting on ESG metrics.

"Nutmeg’s efforts align with trends we are seeing more broadly from investors who want to understand what they own, such as their portfolio’s carbon risk, overall ESG quality, sustainable impact exposure and how it compares to a benchmark."

Aj Somal, IFA at Birmingham-based Aurora Financial Planning, said: "This is an interesting development and keeps up to date with increasing trends within the marketplace, and could be of potential interest to my clients.  

"There has been an increasing trend towards clients becoming concerned about social and environmental issues, especially from those clients who use social media often."

Kevin Steinlechner, chartered financial planner at London-based Radcliffe & Newlands, said: "We find that younger investors are more engaged in socially responsible investing.

"With the best will in the world, distilling thousands of metrics into a 1 to 10 grade is a pretty subjective process.  Some, if not all, of the individual criteria are subjective and without an industry wide standard, it won’t be possible to compare portfolios from different money managers.