The massive disruption and uncertainty generated by COVID-19 is understandably creating significant anxiety in the global community. At times like these, it is good to try and stand back and ruminate on the big economic changes the world is facing and the ways we can embrace these changes as a consumers, citizens and investors.
Sustainable investing is one of those.
The UN defines sustainability as “…development that meets the needs of the present without compromising the ability of the future generations to meet their own needs.”
As citizens, we can express our political preferences around sustainability through the ballot box. As investors, we can also express preferences through participation in global capital markets.
Environmental, Social and Governance (ESG)
Sustainability in the context of investment can be applied using the framework of ESG screens as illustrated:
One key question investors face is how to implement an ESG preference without compromising their desired investment outcomes. For instance, how can they reduce their portfolio’s environmental footprint while maintaining sound investment principles and achieving their investment objectives?
Common Sense Investing and Sustainability
WARR HUNT’s approach to ESG enables our clients to invest in line with their values and sustainability preferences without compromising their desired investment outcomes.
In conjunction with our investment partners, we take a four-step approach to implementing our investment philosophy ESG overlay as follows:
Importantly, this process of screening and exclusions can be applied to fixed interest as well as equity. The principles are broadly the same.
The key takeaway is that investing well and incorporating values around sustainability need not be mutually exclusive.
By starting with a robust investment framework, then overlaying the considerations that represent the views of sustainability-minded investors, this allows for a cost-effective approach that provides investors the ability to pursue their sustainability goals without compromising on sound investment principles or accepting lower expected returns.
So please contact us should you wish to learn more about WARR HUNT'S approach to sustainability investing.