Responsible investors silenced the sceptics last year. The devastation caused by the pandemic and the social justice protests witnessed around the world proved that value-led investing is not just a PR exercise or a luxury to have when times are good. It can have a material impact on portfolios. Owning assets that protect the environment, treat employees, suppliers and communities respectfully and are led by people from a range of backgrounds could reduce risk and protect value.
And judging by the performance of ESG funds last year, investing responsibility does not necessarily mean sacrificing return. Despite economies across the world taking a hit from the lockdowns that were ordered in response to the crisis, environmental and social issues did not take a backseat. Instead, “build back greener” has been at the heart of discussions on how governments should manage the impact of the pandemic and breathe life back into their deflated economies.
The British government appears to be on side here. The recently implemented Pension Schemes Bill includes new regulation directing larger pension schemes to prove how they are protecting savers from the impact of climate change.
Moreover, the UK government’s commitment to a legally binding carbon neutrality target by 2030 shows that this is no longer a niche issue and that attempts to revive the economy may even accelerate the “green revolution”.
Responsible investing is a broad church and investors are realising that a holistic view of these issues is needed to make a positive impact with their capital. Cutting harmful gas emissions in portfolios does not do the job anymore. Investors are more sophisticated and understand that a range of issues need to be factored into their decision making to build a sustainable future, such as water conservation, biodiversity and the food chain.
A case in point is the Covid pandemic, which is believed to have started in a food market, highlighting the potential scale of consequences of problems in the food chain. So responsible investing as an investment strategy looks like it is here to stay and, if lessons have been learnt from the pandemic, it may have picked up a few more followers.
Watch the roundtable
Head of responsible investment at Border to Coast
Jane Firth is leading the development of Border to Coast’s responsible investment strategy across its externally and internally managed assets. Prior to joining one of the UK’s largest public sector pension pools, Firth was a portfolio manager for South Yorkshire Pension Fund and oversaw its voting activities, responsible investment policy and stewardship practice.
Jacqueline Amy Jackson
Head of Responsible Investment at London CIV
Jacqueline Amy Jackson leads the London Pension Collective Investment Vehicle’s (London CVI) commitment to sustainable finance by developing and implementing strategies to protect members from the financial risks of environmental and socioeconomic issues. She is a trustee for several charities and an ambassador of the Diversity Project.
Head of sustainable ownership at RPMI Railpen
Michael Marshall is part of Railways Pension Scheme’s fiduciary leadership team where he integrates environmental, social and governance factors into the scheme’s investment processes. He also advises the British Venture Capital and Private Equity Association, the Financial Reporting Council, the Principles for Responsible Investment and the Institutional Investors Group on Climate Change.
Head of sustainable investing and fund manager at Jupiter Asset Management
Abbie Llewellyn-Waters joined Jupiter Asset Management 15 years ago and today is head of sustainable investing and a fund manager in the firm’s environmental and sustainability team. She also works with gender diversity campaigner the 30% Club and is an ambassador for the Diversity Project.
Head of responsible investment at Newton Investment Management
Ian Burger is responsible for integrating ESG and stewardship throughout Newton’s investment process. He influences the ESG debate through being co-chair of the GC100 and Investors Group, vice chair of the International Corporate Governance Network and a member of the Pension and Lifetime Savings Association’s Stewardship Advisory Group.
Co-head environmental strategies at BNP Paribas Asset Management
Edward Lees co-manages the BNP Paribas Energy Transition fund and Environmental Absolute Return Thematic fund. His responsible investing track record includes founding and managing a thematic investing and special situations group for Goldman Sachs and setting up thematic fund Clear River Capital LLP.