May #3 Firstly, please excuse an indulgence. Some of you may remember when my father passed, we asked for donations to the charity War Child at his funeral. The plight.
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May #1
One of the challenges with writing these is not so much finding something to write about, it’s that there is so much I could write about! I know what excites and interests me about this industry, but what about you? What would you like to know more about and read in these musings? Let me know.
I’ve been thinking that these musings might be a great spot to give sort of cliff notes on terminology you might come across but not know exactly what we’re referring to, or why its relevant. And today I’m starting with a brief look at ESG.
Some people know a lot about it, some not so much. I wanted to break it down a bit, for those who may be interested to know more. ESG stands for Environmental, Social and Governance. ESG investing involves investing in companies (or not) based on their environmental impact, social practices (like how to companies treat their employees and the communities around them), and governance structures. Governance structures can include issues such as board diversity, executive compensation, shareholder rights, and ethical business practices.
Many of us are making changes to our lives to be more environmentally and socially conscious – some sources quote this figure for the UK as being at around 84%, although how that’s calculated I’ve no idea. Whether it be installing solar panels to our homes, buying electric cars, reducing our energy usage or simply trying to cut back on our plastic consumption, many of us are doing our bit. Consumers are showing an appetite for their investments to reflect their ethics, and the markets are finally paying attention. Admittedly this is partly being driven by the FCA encouraging good ESG practices across the board, rather than (perhaps) fund managers wanting to don their superhero capes, but we take our wins where we can.
An investor can choose to select funds based on Exclusionary strategies – where companies are excluded from the bank of available funds if they fail to meet certain criteria – or Inclusionary strategies – funds actively seek out and invest into companies that do meet certain positive criteria. Also referred to as positive and negative screening.
Increasingly, ESG funds are giving more standard funds a run for their money in terms of performance, where in the past they had been weaker. Specific ESG funds can sometimes still come with higher costs than more standard funds, so it’s worth paying attention to this. What is, from my point of view, even more interesting is that standard funds are working far more actively on improving their ESG ranking and bringing ESG considerations into their planning. But the FCA is anxious that we look out for Greenwashing – simply put, where an investment firm or fund manager misleadingly inflates a funds ESG credentials, intentionally or otherwise.
So, to the markets
May #2 In a completely unsurprising turn of events, the Tories have not done well at the recent local elections. Can you feel the shock waves running through Parliament? No,.
Read moreNot all of its bleak out there. Sometimes we hear good things in the press. Ok, not often. But sometimes. For example, news came in the press recently that the.
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