In our latest blog, PM+M’s financial planning director, James McIntyre, explores the increasing popularity of ESG investments and explains how PM+M can help you invest responsibly.
In recent years, we have seen an increase in demand for investments that consider Environmental, Social and Corporate Governance factors, with clients opting to invest in a manner that minimises their carbon footprint, avoids animal testing or considers human rights matters.
What are ESG investments?
ESG, as mentioned above, refers to Environmental, Social and Corporate governance factors which are considered by individuals when deciding where to invest their money.
- Environmental criteria consider how companies minimise their impact on the environment or promote positive stewardship of environmental issues.
- Social standards consider how businesses manage relationships with employees, communities, suppliers, and customers.
- Corporate governance refers to how the leadership team conducts themselves in areas such as the company shareholders, executive remuneration/bonuses, company culture etc.
By considering these factors and opting for investments which score highly in these areas, you can be sure you are investing responsibly, however, it is always beneficial to speak to a financial adviser who can assist you with these choices.
How can PM+M help you invest responsibly?
Whilst working in conjunction with A J Bell InvestCentre, we have introduced the PM+M Responsible Managed Portfolio Service.
Wherever possible, we invest in markets which effectively exclude controversial industries like munitions, tobacco, adult entertainment, fossil fuels and genetically-modified organisms. Additionally, by utilising this service, we ensure that we only invest in companies with high Environmental, Social and Governance (ESG) rankings.
When a client invests into our Responsible Managed Portfolio Service, they can be confident that they are contributing to a significant reduction in carbon emissions, as well as avoiding controversial business areas that may harm society and the environment.
How does PM+M’s Responsible Managed Portfolio Service compare to our standard Managed Portfolio Service?
- The estimated carbon intensity of the responsible portfolios (a measure of the weighted average of the carbon intensity of each of the underlying portfolio constituents) decreases by an average of 65% in comparison to the standard service
- The average ESG score is uplifted by 21% by choosing the Responsible Managed Portfolio Service
- 7% of companies in the standard Managed Portfolio Service are removed due to the ESG screening process
- We currently set tolerance thresholds within all of our portfolios but, by utilising the Responsible Managed Portfolio Service, clients can take advantage of 0% tolerance thresholds, relating to controversial weapons, tobacco production and fossil fuel extraction
Source: AJ Bell Investments Calculations & MSCI
Why choose a Managed Portfolio Service (MPS) approach for your investments?
The advantage of PM+M’s Managed Portfolio Service (MPS) approach is that we will continually monitor the market, conduct ongoing due diligence in relation to the funds held within the Responsible MPS portfolio and proactively make fund and asset changes when we feel necessary – without the need for extra paperwork each time we recommend changes! With our Responsible MPS portfolio, you would be sat in a portfolio in line with our ‘best way of thinking’ at any moment in time whilst simultaneously ensuring that ESG standards are maintained.
Get in touch
If you would like more information on our Managed Portfolio Service or would like to discuss your specific situation in further detail, contact James by using the button below.
The value of investments can fall as well as rise. You may not get back what you invest.