Last year we published an article about ESG. It referred to Environment, Social and Governance expressed as a risk factor when investing
The relevance of ESG is everything to do with sustainability through investment fund managers making a conscious decision to invest in companies that have strong governance, positive social policies and take care regarding their environmental impact, both positive and negative. The commercial logic is straight forward, better run companies are likely to have a more profitable and sustainable future.
The logic of preference is that we are more aware of the fragility of our environment and investing this way will make a difference. What sets Rutherford Hughes apart is that we apply the ESG risk factor to our proven investment strategies to deliver a fully diversified proposition, managed by ourselves on an ongoing basis in pension, ISA, trust or general investment account. Investing with a conscience without penalising yourself is a refreshing change and something that is truly gathering a head of steam with new investment money heading to those companies that take account of the ESG factors in running their businesses.
Enhancing this international trend, the UK Government has set ambitious targets for electric cars and for a net zero carbon emission economy by 2050, which will only add to the momentum. This is good news, and this region is seeing a tangible benefit in that Britishvolt, a start-up battery manufacturer, has chosen the old Blyth power station site to build its new gigawatt factory. It will directly create 3,000 jobs and a further 5,000 in its supply chain. It is to cost £2.6 billion and is the biggest investment in the region since Nissan in 1984. Another example is Tesla whose share price has increased six-fold in the last year.
As you will know, it makes electric cars, although many consider it primarily a battery manufacturer. So how have the ESG strategies performed, and is there a difference? If we look at 2020, from1st January to 31st December we have a table comparing our standard strategies with our ESG versions, together with the Investment Association categories they would sit in. You should be aware that past performance is not a guide to future performance. Capital is at risk. Charges and fees except fund managers’ charges are excluded from the performance.
If the concept of sustainable investing together with all that is going on in our environment intrigues you, come and talk to us. We have an excellent record of looking after our clients’ best interests and are happy to help you change. There is no doubt that there is a strong shift towards environmental and sustainable businesses. Your portfolios should reflect this, and indeed mine does. The exciting thing is that investing with a conscience is making sound financial sense too. Our performance proves this. The world is moving at an increasing pace, this is not the time to be left behind.
