Investment and the bigger picture

Julia Dreblow, Director at SRI services, shares her expertise on Socially Responsible Investments (SRI)

Good Money Week: Ethical and sustainable investments 

There is an emerging trend in the investment world that individual investors generally know little about, despite its rapid expansion in the pensions and institutional investment worlds.

It is known by different names in different markets - and none of the names are terribly memorable.  Yet it is none the less important.  The area I am referring to is ‘sustainable and responsible investment’ (SRI) – which encompasses what started out as ‘ethical investment’ thirty years ago,  but now includes so much more.    

In the investment world ‘SRI’ refers to those investments which consider broader, perhaps less conventional business issues in addition to regular financial analysis.  This includes issues relating to the environment (e.g. climate change, natural resources and pollution), social issues (e.g. human rights, equal opportunities and labour standards) and corporate governance (i.e. how businesses are managed by senior management). 

Over the years our industry’s affection for number crunching has rather crowded the consideration of such issues and how they relate to what companies actually do,  how they operate, and their impact on  ‘people and planet’.  Yet these things are relevant to both major investors, individual investors.... and of course everyone else. 

October 19 – 25 is ‘Good Money Week’.  The event, organised by SRI industry body UKSIF (UK Sustainable Investment & Finance), aims to improve awareness of the importance of such issues to investors. 

SRI and ethical investment can however be somewhat complicated because as it has grown the area has become much more diverse.   Indeed, there are now investment options that focus on issues such as sustainability, the environment, ethics (eg avoiding armaments or tobacco companies), clean technology, faith and ‘engaging for change’ .  All of these can be grouped under the ‘SRI’ banner, but are likely to invest differently and appeal to different people. 

The good news is that all financial advisers can discuss such options with clients - and indeed ‘best practice’ (as set out in the Adviser ISO) dictates that they should. 

Given the somewhat personal nature of this area however investors often like to do some background reading on this topic before speaking with an adviser.  One useful place to start is the ‘SRI Stylefinder’ website which includes a description of the different SRI Styles and a questionnaire to help people work out which styles are most likely to match their personal aims.  If these are areas that are of interest to you, you may also like to check out the Good Money Week website where ‘bigger picture’ investment is currently on show!


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