Sustainable Investing

Is there a difference between sustainable investing, ESG Investing and Impact investing? The financial services industry is legendary for its use of jargon, and it is difficult to navigate for those who are looking at investing ethically.

At Trinity Wealth Management we offer a range of solutions which cover the differing requirements our clients want from their socially responsible portfolios.

Traditional Ethical Investing:

For some, it is more about what they don’t want to be invested in. This is known as ‘negative screening’ or ‘exclusionary investing’.

Ethical investors will typically look to avoid investing in companies which are negatively impacting society or the environment.

 
This will include alcohol, tobacco, adult entertainment and gambling as well as controversial weapons and non-renewable energy.

ESG Investing:

ESG stands for Environmental, Social and Governance and is defined as ‘A set of standards for a company’s behaviour used by socially conscious investors to screen potential investments’.

 
This is the broadest area of sustainable investing, as there is a degree of subjectivity in choosing which companies to hold in a fund.

However, ESG fund managers have the opportunity, as shareholders, to engage with companies to encourage them to change poor practices.

It is important to check whether the fund managers are using their influence as shareholders to engage with the Board and to vote where required.

ESG Investing still involves a degree of negative screening, but can be seen to have the potential for greater impact.

Social Impact:

For some clients, an assurance that their capital is being used to create a positive impact on both the environment and society is most important. In addition, this needs to be measurable.

In 2015 the United Nations gave us the 17 UN Sustainable Development Goals which gives us a benchmark against which we can measure impact.

At Trinity we believe clients’ capital can be used to make a difference in this world. All personal savings of the owners of Trinity are invested in one or more of the above ways.

We have embraced third-party wisdom where required and are confident that the suite of active and passive sustainable investing solutions will meet the needs of most investors who wish to see their capital used for good.