ESG and sustainable investment is set to become even more important for charity investment portfolio management putting pressure on advisers to enhance their credentials, new research with major charities from wealth manager, Investec Wealth & Investment (UK) shows.
The study by the company, part of Rathbones Group, with senior executives at UK charities with a collective GBP4.074 billion of stock market related investments found 88 per cent say ESG credentials are currently important when selecting investments for their portfolios with 26 per cent saying it is very important.
Over the next three years 94 per cent say ESG will become more important when selecting investments with 16 per cent saying it will become significantly more important. Just 6 per cent questioned say its level of importance will not change.
That will put pressure on investment management advisers working with charities, the research found. Currently around a quarter (26 per cent) questioned say investment managers’ ESG credentials are very important when awarding investment mandates, with 60 per cent saying they are quite important.
The importance will increase according to 97 per cent questioned with 15 per cent saying it will become much more important. Just 3 per cent believe ESG credentials will remain at the same level of importance over the next three years.
Nicola Toyer, Head of Charities at Investec Wealth & Investment (UK) says: “ESG and responsible investment has become more important than ever for charity Trustees as they seek to align their investment portfolios to their values and purpose. In our view, this is now considered equally, if not more important than investment performance.
“At Investec, the integration of ESG risk factors alongside effective stewardship is fundamental to our investment process and helps us to make better investment decisions for our clients. From a charity perspective, ESG goes further than that and often translates into ‘doing good’. Many charities wish to add a values-based overlay to the portfolio with the addition of ethical restrictions.”
