Back in February 2022, you might have read How ESG investment offers the possibility of great returns aligned to your values, in which we revealed the latest research into investments that concentrate on environmental, societal, and governance factors.
With investors feeling confident of good returns, inflows looked set to continue rising, despite concerns about the potential effects of greenwashing.
Since then, further research has suggested that more than half of investors plan to increase their sustainable holdings over the next 12 months. Meanwhile, the government has responded to its ‘Climate and investment’ consultation and doubled down on its commitments to the Paris Agreement.
Keep reading for your look at the constantly changing face of sustainable and ESG investing. Plus, why do 37% of investors want their pension to be sustainable by default?
Investors’ appetite for ESG investments continues to grow
Recent figures, published by FTAdviser, have found that more than half of investors are looking to increase the amount they hold in sustainable funds.
The research confirms that 38% of those surveyed intended to make a small increase, while only 6% were looking to decrease their sustainable holdings. Those in pre-retirement are especially likely to favour ESG and sustainable funds.
This is especially encouraging in the face of high-profile reports of “greenwashing” – the process by which funds or corporations overstate, either intentionally or accidentally, their sustainable credentials.
The government has shown a commitment to aligning policy with the Paris Agreement
Back in October 2021, the government launched a consultation titled ‘Climate and investment reporting: setting expectations and empowering savers’. It looked at potential policies for aligning company reporting with the targets set out by the Paris Agreement. The consultation closed in January 2022.
There has been some trepidation from the industry around the mechanisms that would be put in place. The government, though, has vowed to plough ahead with its commitment to achieving the below-2°C target, as set out by the agreement.
The Department for Work and Pensions (DWP) has confirmed that from October, more than 80% of UK members will be invested in pension schemes, which are helping to limit the climate risk to their members’ retirement incomes.
New requirements, set to come into force in the autumn, will require workplace schemes to explain how their activities are aligned with the Paris Agreement. The rules will apply to schemes with £1 billion to £5 billion of assets.
This will come as good news to many workers. Interactive Investor’s Great British Retirement Survey 2021 found that 37% of investors wanted their workplace pension to be sustainable by default.
This compared with 33% who were against that proposal, and 29% who answered that they didn’t know.
Hartsfield Planning make it easy to align your money with your values
At Hartsfield Planning, we can help you to “green” your money, in line with your values on sustainability and ESG factors.
From answering questions on sustainable pension options to rebalancing your investment portfolio, our expert planners can help you to achieve your long-term goals, with peace of mind.
You might consider Hartsfield’s Responsible Portfolios, our in-house investment proposition aligned with the UN’s Sustainable Development Goals.
Among the UN’s 17 goals are:
- Eliminating world poverty and hunger
- Achieving quality education, clean water, and gender equality for all
- Building world economies through supporting industry and innovation
- Protecting life on land and at sea through climate action
- Promoting peace within strong, effective, and accountable justice systems.
Hartsfield’s Responsible Portfolio is designed to invest your money in a way that aligns with these aims.
And while you might not yet find funds that specifically address each of the 17 objectives, the sustainable investment market is growing fast.
If you have a long-term investment goal in mind and would like your funds to align with your values, get in touch to discuss why our responsible portfolio could be right for you.
Get in touch
Hartsfield Planning can help you stay on track to achieve your long-term goals while your money remains aligned with your values.
If you would like to discuss any aspect of your long-term financial or retirement plans, please get in touch and find out how our team of expert planners can help.
Please note
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.