Although a fund may rank highly against its peers, it may still have a holding in a company that could be considered unethical.
There are four core components:
- Use of proceeds
- Process for Project Evaluation and Selection
- Management of Proceeds
- Reporting
ESG in application
If what you have read so far appeals to your agenda, here are some considerations that will ensure your investments and ethical judgements align:
Shareholders have a responsibility to engage with corporates (the guardians of investor capital) to drive change.
The Stewardship Code (2010) lays out principles for institutional shareholders who hold voting rights to act in the interest of beneficiaries.
If you are a stakeholder speak to your investment manager to ensure that your voting rights are being correctly utilised
Investors should identify both the tangible and intangible benefits of deploying their capital for positive influence and map these against the various supranational initiatives, such as the UNs 17 SDGs, to determine success
The market is expansive and continues to balloon as it evolves. It is essential that investors thoroughly research funds.
Although a fund may rank highly against its peers, it may still have a holding in a company that could be considered unethical. It’s a grey area, so take time to understand underlying holdings as seemingly similar mandates can often hold very different companies
There is a mass of information online to help investors identify key thematic mega-trends for the future.
Care has to be taken to detect a true opportunity from corporate greenwashing, so do your research, think long-term and once invested remind yourself from time to time why you bought the theme in the first place
Investor capital is an important mechanism for change, if responsibly deployed.
Harry Merrison is an investment manager at Kingswood