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Achieving Financial Security In A World Worth Living In

 

Responsible investing can make a huge difference…

Responsible investing is the strategy and practice of incorporating environmental, social and governance factors into investment decisions. Investing in this way uses money for the benefit of the wider community and world around us. It is a forward looking approach that seeks to deliver lasting, long-term returns in an ever-changing environment.

It is a goal for many of us to be financially secure, however, this goal is only worth chasing if we have a healthy and sustainable world to enjoy it in. Promoting a green thinking society, and working to tackle issues such as climate change and human rights requires action from all industries, sectors, governments and international bodies.

Many companies use environmental, social and governance (ESG) criteria to ensure they are operating responsibly. Fund Managers use these ESG considerations to identify the risks and opportunities which could affect a firm’s long-term sustainability.

The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise.  You may get back less than the amount invested.

What is ESG? - Environmental

Environmental, social and governance investing is used to screen investments based on corporate policies, encouraging companies to act responsibly.

Environmental

Environmental factors look at the way a company takes effect on the planet, and the way the changing planet affects a company, including issues such as:

Biodiversity – It is important to sustain the variety of animals, plants, fungi and microorganisms that make up our ecosystems. Human activities are lessening the diversity of natural habitats, ecosystems and therefore biodiversity levels.

Energy Efficiency – Being more energy efficient means using less energy to perform the same tasks with the aim of reducing waste, limiting greenhouse gas emissions, and capping energy costs.

Water – Life on earth is made possible by having access to clean suitable water supplies. Climate change is one of the greatest polluters of the ocean, and has huge impacts on freshwater levels, causing harm to millions of people and ecosystems.

Climate Change – Extreme weather events and unpredictable temperatures can be attributed to human activity and the sheer volume of greenhouse gas production.

Waste – Increased human activity has resulted in increased waste, causing harm to habitats, animals, and people. Aiming to reduce waste helps support a more sustainable way of living, protecting the world around us.

What is ESG? - Social

Social

Social factors relate to how the company interacts with people; employees, customers and communities. They include aspects such as:

Community impact – Businesses that are aware of the opinions and needs of their local community are more likely to be rewarded with loyalty and support.

Human rights – Protecting people rights, liberty expression, and freedom from slavery should be available to everyone.

Employee well-being – Inclusion of diversity, appropriate pay, flexible working hours, and employee benefits can increase employee loyalty and reduce staff turnover which helps to drive levels of business success.

Supply chain management – The same social principles of community, human rights and employee well-being should be required of companies throughout the supply chain.

What is ESG? - Governance

Governance

Governance factors consider how a business is overseen, the integrity and diversity of its leaders, and the accountability to shareholders. Factors we take into consideration include:

Board diversity and independence – The right people, with the right skills, experience and acceptance of culture must exist in order to make balanced board-level decisions.

Executive pay – Ensuring the best value for money is gained from company leaders who are setting and leading business strategies.

Reporting and transparency – Effective communication is imperative for all businesses and we check robust reporting and audit processes are in place.

Anti corruption and anti bribery – All businesses we invest in must adhere to anti corruption and anti bribery policies.

How Engagement is a key factor in ESG delivery

We maintain ongoing discussions with companies in which we invest with, to continue to deliver on ESG matters.

St. James’s Place ensure that;

  • All engagement is subject to oversight from their Board and Investment Executive Committee.
  • The Responsible Investment team provides sophisticated ESG insight through in-depth and on-going training.
  • A superb set of standards which must be met by fund managers during selection so that Responsible Investment standards can be met.
  • Monitored fund managers to ensure they are conducting engagement activity.
  • The St. James’s Place control allows the removal of fund managers if required.
  • Regular discussions with all fund managers to discuss activity and to share and discuss strategic insight.
  • All processes and activity is shared, so clients are comfortable with investment decisions.
  • A set of robust policies and processes to manage any conflict of interest.
  • Clear expectations are set for fund managers when exercising voting rights.

 

The Engagement Model

The St. James’s Place Engagement Model has four steps;

  • When investing they seek client’s views on responsible investment to ensure the upmost clarity.
  • They define responsible investing standards for fund managers. Continually assessing, selecting and monitoring them.
  • Fund managers apply their responsible investing expertise, encouraging companies to improve practices. And where appropriate, demonstrating ESG expectations.
  • A continued drive to deliver better outcomes both environmentally and for society.

The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested.

Responsible investing has come a long way and is in no way a new phenomenon.

How do St. James's Place integrate ESG with fund management?

Responsible investing has come a long way and is in no way a new phenomenon. Responsible investing is about considering the global impact a business has on the world, and the people around them. The need to reduce waste, be more efficient, consider employees, customers and wider communities has always been, and will continue to be, good business practice, and so we hold ESG principles at the heart of our investment strategies.

Fund managers are all required to be signatories of the United Nations supported Principles for Responsible Investment (PRI). This is the industry standard for assessing a firm’s overall behaviour in relation to responsible investment whereby signatories are assessed and scored on their approach.

Active Ownership

Robeco
St. James’s Place have partnered with Robeco, global leaders in company engagement. This partnership allows Robeco to connect with the companies that St. James’s Place fund managers invest in.

What impact does this have on you as a client? Through this partnership, Active Ownership Reports are produced Quarterly – allowing us at Wells & Co to provide you with in-depth engagement results to highlight through real world examples how your money is making a difference.

At Wells & Co we are committed to responsible investing so you can have confidence your money will be invested, not only to get maximum returns, but also to form a better future for the wider community and the world around us.

Phoebe Wells

Excellent Customer Service Support