Investing with the help of an investment fund in the hopes of making positive returns is a practice that has been around for decades, continuously proving to be a favourable choice for many investors worldwide. Being environmentally and socially conscious, whether it is the act of recycling, switching to public transport, or focusing on charitable events, is practised by many across the globe. Traditionally speaking, these two concepts have had their own associations, without spilling over into one another. However, the two go hand in hand and seem to be finding themselves in the same sentence more often than expected in recent years. The true question is – how? How could investment funds possibly be good for the environment?
Environmental Social Governance
Environmental Social Governance (ESG) has been making the rounds in recent years, growing in popularity with a mission to promote the importance of environmental, social and governance issues within organisations. The goal of ESG-based companies is to ensure that all relevant business practices are aligned with best practices in the environmental and social spaces. ESG companies assume three core pillars:
Environmental: The initiatives taken by a company to lower their negative impact on the environment, including carbon footprint.
Social: The impact that the company has on social matters both internally and externally from the company, whether focusing on racial diversity and women empowerment – social responsibility can take on a number of forms.
Governance: The way in which the company’s board and management is structured, including diversity and the greater interactions with shareholders.
Investment Funds Making an Impact
The idea of investing in ESG organisations often coincides with one’s personal values, which makes this investment type favourable by many. While hunting for individual ESG firms to invest in can be both intimidating and time consuming, investment funds focusing on just that are the perfect gateway to matching up individuals with their ideal investment. These investment funds give clients the power to invest in projects that not only yield potential profitable returns but also do good for the planet and society as a whole, a true win-win situation. Here is a look at some of the most impressive investment funds that are supporting the environment.
SJ Global Investments
Being domiciled in Dubai, as well as having representatives across an impressive 27 countries, SJ Global Investments is making a mark in the industry with their strong vision to create a better environmental and societal future for generations to come, with a strong focus on less fortunate nations. Neil Walsh, SJ Global Investments Group Managing Director expressed the team’s interest in contributing to Uganda’s 2040 National Development Plan (NDP), focusing their efforts on improving infrastructure development, commercial agriculture, information technology, mining, education and health sectors. Apart from their efforts in developing nations, what truly makes SJ Global Investments stand out is their diverse team, coming together from different walks of life, and channelling diversity from within the team – outwards. Whereas the majority of investment funds have a mere subsection of environmental, social or sustainable investment options – SJ Global Investments focus on ESG as their main forte, being an all-rounder in the ESG space.
With SJ Global’s new venture Global Green Fund, the team is looking to support global climate change and sustainability, with some objectives including partnering with and developing carbon neutral technologies globally, developing a cumulative pool of 10 Million hectares of agri-forests globally, participate in reducing carbon footprint of 300 Million tons through industrial projects and more. The in-house project and portfolio management experts will assist in providing financial assistance across a number of initiatives that will push for sustainable projects.
Shelton Green Alpha Fund
As expected from the name, Shelton Green Alpha Fund focuses on identifying “green” companies which have above-average growth potential. Companies considered to be green by Shelton are ones to work towards improving human well-being through the increase in economic efficiencies while concurrently reducing environmental risks. Seeking and funding companies that provide products and services to help economies mitigate environmental and economic systemic risks is at the core of what Shelton Green focuses on. One of Shelton Green’s most prominent clients Consumer Energy has committed to being coal-free by 2040, while reducing its carbon emissions by 90%.
Being in the investment market for just over 100 years, 1919 Investment Counsel has made its mark in the investment industry through their service for individual, family and institutional clients across the globe. Along with providing services such as financial planning, portfolio management, proprietary research and estate planning, responsible investing has been a popular subsection of their business in recent years. Through their ethos of diligent research into ESG compliant entities, 1919 IC ensures that their clients have access to top-performing companies which have a positive impact on the planet as well as on society as a whole. The broad ESG approach within 1919 IC tackles issues of clean and accessible water, low-carbon futures, inclusivity and diversity, responsible production and consumption and working towards a truly global community. These five main impact themes of 1919 IC together with United Nations’ 17 SDGs complement all three aspects of the ESG scope.
Labelling themselves as the “investing engineers”, Robeco continuously highlight their core practice on the invisible layers found within investment portfolios, in order to provide their clients with transparent and honest investment solutions. Robeco strongly relies on the research behind their investment processes, with a touch of human wellbeing throughout. After being pioneers in the investment field for 90+ years, Robeco directs its strategy and success on their extensive years of knowledge and expertise. Today, Robeco manages assets worth 146 Billion Euros, with 131 Billion Euros integrated across ESG assets. With 40% of investments with ESG characteristics, 60% of Robeco’s investments are sustainable in nature.
Vanguard, a well-known name in the investment game has seen their continuous success flourish through their personalised investment solutions. Vanguard saw their FTSE Social Index Fund launch in 2000, leading up to them being one of the largest ESG-screened index funds in the United States. By utilising the same investment strategies and tools across all of their products, Vanguard dedicates their efforts in securing long-term value for all clients, backed up with reliable reporting and research methodologies. 2021 saw Vanguard achieve 100% of renewable energy across its global operations. According to 2019 bassline levels, established in 2021, emissions were reduced by 20% per full time employee, 5% of electricity and 20% of water consumption per square was reduced with 80% of landfill waste was diverted as part of the organisation’s sustainability goals.
With environmental and societal challenges seemingly on the rise year after year, investing in funds that support these causes can bring investors one step closer to making a change to the globe. Although different in missions and visions, funds such as SJ Global bring about change to a magnitude of environmental and social issues, focusing on diversity from within as well as pushing the limits of green sustainability with their new and exciting venture, Global Green Fund. With organisations such as Vanguard, Robeco, 1919 Inc and Shelton Green also jumping into this sector – there is no doubt that environmentally friendly investment funds are the way to go. Are you ready to invest in the future?