Responsible Investing

Responsible investment serves as an encompassing term to describe funds that aim to effect positive change, either environmentally or socially. This approach to investment is multifaceted, falling under four broad categories: ethical exclusion, which avoids investments in companies or sectors with harmful practices; responsible practice, focusing on companies with ethical operations; sustainable solutions, investing in entities providing environmentally friendly solutions; and impact funds, which aim for a measurable, beneficial social or environmental impact alongside a financial return.

The landscape of investment is witnessing a shift, with an increasing number of pension savers expressing interest in the allocation of their funds. The concern is no longer solely about securing the best returns; there is a growing desire for investments to contribute positively to society and the environment. In response to this shift, the Department for Work and Pensions (DWP) is actively consulting on enhancing the governance, strategy, and reporting of occupational pension schemes, particularly focusing on the impact of climate change.

The surge in Environmental, Social, and Governance (ESG) issues marks a significant turn in investment considerations. This growth stems from a heightened awareness of climate change, global responsibilities, and social issues. Investors are progressively leaning towards supporting companies that demonstrate responsibility and contribute to creating an economy that is cleaner, safer, and healthier. The emphasis is on fostering sustainable development while achieving financial growth.