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Does Investing Responsibly Mean Less Returns?

Recently, one of our expert advisors here at Greenfields discussed with a client about the likelihood of them being interested in responsible investment solutions. This client responded with a “no”, and when the topic was discussed further, said this:

“Ultimately, my need to make money is more of a priority than a responsible solution.”

Seemingly, this attitude came from the assumption that if investment choices are more limited, their performance will suffer as a result. However, times are changing…

“Responsible investments”- otherwise known as ‘ESG’ (or ‘Ethical, Social and Governance’) Investments – have long since been perceived to limit the maximum possible returns you can get from them. Investing responsibly can also have many different meanings, but the three core factors are included in the name:

  1. Ethical – investing in causes or organisations that relate to the wellbeing of our planet, such as those to do with climate change, population growth, and deforestation
  2. Social – centres on addressing social factors such as wealth inequality, gender discrimination, homelessness, etc.
  3. Governance – investment in balancing the interests of company management with those of their employees and suppliers

These three areas underpin approaches to responsible investment, and many investment houses now integrate ESG into their investment process. Today, more and more people are choosing to invest responsibly, with ESG considerations playing an ever-greater role in their investment choices. Slowly, the industry has realised that this will be a central tenant in making returns, moving forward.

Going back to our earlier client’s concerns, the response they were given was simple: investing responsibly does NOT mean a reduction in returns. In fact, many “responsible” funds are now being used in our investment portfolios due to their outperformance, regardless of clients’ personal preferences. This could be the chance you’ve been waiting for to start growing your wealth in more rewarding ways – financially, and ethically.

Interested in responsible investing, or want to start making a change to your current portfolio? Book a meeting with one of our experts today…

Over the phone: 01258 857101

Through email: ian@greenfields.biz

Or message us on Facebook: https://www.facebook.com/greenfieldsIFA

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