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Grow your portfolio while encouraging responsible practices.

For many years there have been funds that excluded armaments, tobacco, and gambling investments, also known as Socially Responsible Investments. These were based on simple exclusions, easy to define and avoid. The SRI philosophy has, over time, developed into a more comprehensive Environmental, Social and Governance (ESG) framework. According to a recent survey, nearly half of investors say they choose funds or companies based on ESG considerations. It is estimated that $1 out of every $3 dollars invested globally is invested in sustainable funds.

Sustainable investing provides a way for investors to align their values with their investing and get their money working for positive change in the world, as well as earning the returns that the capital markets provide in exchange for bearing risk.

Defining sustainable investing

The factors that define sustainable investment are hard to pin down and approaches are inconsistent across the investment industry. A lack of agreement on quantification of ESG factors so they can be robustly measured hampers a standardised approach. Current ESG ratings are based on companies’ focus on managing their ESG risk, rather than necessarily tackling the source of the risk itself. This makes investing sustainably complicated.  A sensible solution to this is to add further layers to the outright exclusions mentioned above by way of underweighting companies who have poor ESG scores whilst overweighting those with more ESG friendly business models and processes. This is a dynamic exercise and may have the positive effect of incentivising poorly performing companies to implement improvements.

Here’s how we do it

The fund managers we use for our SRI portfolios engage in the following when constructing their funds:

  • implement specific bans on companies with businesses in tobacco, nuclear and other weapons, gambling, alcohol, and thermal coal
  • underweight companies with high greenhouse gas emissions intensity, including potential emissions from reserves
  • exclude companies whose activities are inconsistent with UN human rights polices
  • eliminate companies whose activities are likely to cause long-term environmental damage
  • actively invest in companies involved in renewable energy, water technologies and other innovations solving environmental problems
  • consider companies’ waste and water management and other operational efficiencies
  • use their positions as shareholders to effect positive change by using proxy votes and actively engaging with company boards


Certain companies are excluded as candidates for investment. This includes those receiving substantial revenues and profits from tobacco, gambling, armaments, factory farming, child labour and pornography.


Companies with lower greenhouse gas emissions intensity are favoured over those with higher emissions. Heavy polluters and companies with poor waste and water management are also underweighted when structuring portfolios.


The fund managers we use for your portfolios have a good record of investment stewardship. They are strong advocates of companies overseeing and managing material ESG risks and having independent and effective boards.


Sustainable investing will naturally skew towards companies solving the environmental and other problems the world faces. Innovative companies will be preferred over those companies that have failed to move with the times.

Never doubt that a small group of thoughtful, committed citizens can change the world.

What is the effect on returns?

Sustainable or ESG based investing is a relatively recent development and this short timeframe means that performance reporting does not yet have much history. Moreover, definitions of “ESG” are yet to be standardised and remain highly subjective. Studies that have been done do not show that there is extra return from ESG strategies, but nor does it appear to detract from returns.

It could be compared to recycling – we do it because we believe it is the right thing to do. We don’t save money by doing it, but nor does it cost us anything. It does send a signal to companies and governments that we are concerned with the issue, and it aligns with our values. Many investors feel the same way about sustainable investing.  It is a way of ensuring their investments are working in tandem with strongly held beliefs.

How we go beyond quarter-to-quarter returns, to meeting your goals and growing your wealth over the long term.

Why we’re the investment consultant you can trust to act in your best interests.

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