Jean Paul Sartre
You may have heard of something called "socially responsible” or “ethical” investing and maybe you are intrigued and interested in the idea but do not know how to go about finding investments or advisers who can assist you in making investments that meet your own personal “moral compass”.
You might be concerned about the environment and sustainability or you might wish to exclude certain investments from your portfolio on Ethical grounds.
Sometimes known as “SRI”, socially responsible investing can be divided into broad styles
Social investing excludes or includes investments based on certain social criteria. Typically, social screens will exclude companies that earn a certain percentage of their total business revenue through the production or sale of products and services, such as tobacco or gambling.
Sustainable investing focuses on excluding companies that have a negative impact and emphasising companies that have a positive impact on the environment.
Environmental, social and governance investing (ESG) adds the criteria of corporate governance to social and sustainable investing issues.
Few, if any, ethical issues are entirely black or white, and many have shades of grey. Equally, few, if any, companies are entirely good or bad; most have a range of strengths and weaknesses. A further important feature is that the issues change over time, such as the emergence of bribery as an investment concern.
We offer Irish investors a choice of portfolios to meet their investment preferences from traditional investment portfolios through to our Ethical filtered portfolio.
Some people are very specific and prescriptive about what they do and don’t want whereas others are not.
Your attitude to risk and investment aims. These are likely to be a result of your personal situation, including your investment experience, age and health.
Your personal motivations. For some investors, SRI is all about making a difference through supporting and encouraging great companies. For others, the primary motivation is making money.
Your views can change over time: perhaps as a result of a personal experience or external factors.
Your depth of interest in any particular area will vary. Some investors may be well informed and ask for lots of information; others may simply want to know an investment is managed in an ethical way.
We are all interested in different issues. For example, some are primarily interested in environmental issues; others wish to focus on social issues. Some may wish to focus on particular areas such as water supply.
Some people are only interested in one or two issues whereas others are interested in a wide range.
One of the questions that is often put to us is this; “if I invest according to my social principles, will I suffer higher costs and a lower return which could prevent me from achieving my financial planning goals?”
The good news is that SRI appears to provide at least as good a return as most other kinds of investing over the long term.