What’s the hottest topic right now for parents?
Becoming financially secure is a dream for many of us. But it’s only worthwhile if we have a healthy and sustainable world in which to enjoy it.
Those goals are the driving forces in the work of Richard Veal of Pinnacle Wealth Management. He’s a financial adviser; but first and foremost, he’s the father of three children. His job is to help clients achieve financial security. But his children’s future is what worries him most.
“Climate change is undoubtedly the biggest challenge facing society today,” says Richard. “There is genuine fear among some younger people about what the world will look like by the time they get to retirement age. How, or even why, should they plan for the future when it’s so uncertain?”
It’s a sobering thought. That’s why Richard is so passionate about the approach to responsible investing being taken by St. James’s Place. And as one of the UK’s largest wealth managers, its influence on the behaviours of its external fund managers, and the companies they invest in, is considerable.
Environmental, social and governance (ESG) factors are embedded in SJP’s investment approach and used to assess how companies behave and manage their impact on the world. Fund managers are rigorously monitored to see how ESG factors and responsible investing are integrated into their decision-making.
Since 2020, SJP set a minimum requirement that all their fund managers must be signatories of the United Nations-supported Principles for Responsible Investment (PRI); the industry standard for assessing a firm’s overall approach to responsible investing.
That was also when SJP published its first Portfolio Carbon Emissions Report, confirming that all its model investment portfolios are less carbon intensive than their benchmarks.
“As today’s investors, it’s our responsibility to shape that world for the better, for our sake and for those who come after us,” he says. “Responsible investing is about considering the impact businesses have on the world and people. It’s about using money as a force for good. If we can use our clients’ money to positively influence the strategy and direction of the companies we invest in, then we can help create a better future for all.”
It wasn’t always like that. Not so long ago, investing ethically was regarded as a peripheral option for those prepared to put their principles before potential returns. Typically, it involved a ‘negative screening’ approach; avoiding investment in companies involved with tobacco, armaments, gambling, alcohol, and so on.
But responsible investing has come a long way since then, and is now recognised as an important component in creating long-term value for investors. However, Richard stresses that there is a bigger picture to consider.
“There is no doubt the view that investments are measured only by monetary value is changing. Faced with challenges such as climate change, energy consumption and pollution, investors increasingly understand that financial wellbeing is about more than just how much money you’ve got.”
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