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AN IMPORTANT ERA OF INVESTMENT

With issues such as climate change and deepening social injustices increasingly crossing into the sphere of personal finance, conscious consumerism is no longer confined to topics such as avoiding single-use plastic. Investors want to know where their money is going and what good it is doing.

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Breaking Through The Noise

Breaking through the noise

We are committed to building a common language around Responsible investment, which is based on our view that Responsible investment can be used as a catch-all to describe funds using investment as a positive force for change.

 

As part of this framework, we make a clear delineation between ESG and Responsible investment.

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What type of investor are you?

In our view, the analysis of Environmental, Social and Governance (ESG) factors is a hygiene factor that can be incorporated into the investment process of any fund, as both as a risk management tool and a way of identifying opportunities. Therefore, unlike Responsible investment funds, ESG in itself does not produce better outcomes for society or the environment, and so, although ESG and responsible investment are complementary, they should be seen as distinct.

Given the wide brief of using investment as a positive force for change, there are different ways of approaching or implementing Responsible investment and as such it can be best viewed as a spectrum of investment approaches.

1Traditional

Does not consider social and environmental factors.

2Ethical Exclusion

Avoids industries and company practices that cause harm to people or the planet.

3Responsible Practices

Considers the operational practices of the companies in which they invest and supports ‘best practice’ in their respective industries, as well as encouraging them to improve their environmental and social performance.

4Sustainable Solutions

Seeks to invest in companies that are providing solutions to social and environmental challenges and believes in the long-term financial benefits of doing so.

5Impact Investing

Wants to use their money to make a wider positive social or environmental impact as well as meeting their financial needs and wants to see evidence of the social and environmental impact.

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WHAT ARE WE DOING?

Square Mile and 3D Investing share a common goal; to help advisers identify the right fund or fund manager to help meet their client's aspirations, liabilities and, in the case of responsible investment, convictions.

As with all investments, we recognise that investors have broad and differing needs in this space, with some seeking guidance or opinion and others requiring independent and objective verification of a fund's credentials and credibility.

In recognition of this, we have maintained Square Mile and 3D Investing's distinct approaches to fund research, with the former offering an in-depth qualitative analysis of funds and fund groups and the latter an extensive and evidence-based audit.

RESPONSIBLE INVESTMENT RATINGS GUIDE
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Square Mile ESG Assessments

An assessment of ESG integration, at both a company and a fund level, that is applicable for all funds within our Academy of Funds.

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Square Mile Responsible Ratings

A combined financial and responsible rating.

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3D Corporate Certifications

An asset manager level verification of commitment to responsible investment and their capability across the group.

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3D Fund Certifications

An independent audit of a fund’s standing on doing good, avoiding harm and leading change, which does not include a financial assessment.

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3D Impact Ratings

A subset of the 3D Fund Certification for funds focused on positive impact. This follows the same process as fund certification but with an additional impact rating.

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Sustainable and Impact Portfolios

Square Mile’s Sustainable and Impact Portfolios have been designed to meet the needs of investors seeking to do good with their money, whilst also meeting their financial goals.

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Academy of funds

Our research is fuelled by a qualitative process and our ratings reflect Square Mile’s conviction in each fund’s ability to deliver on its expectation. Access the latest research and opinion for over 300 funds.

VISIT ACADEMY OF FUNDS

Adviser guide to sustainability

In this guide, we explore the regulatory changes surrounding Responsible investment, what this means for you and your clients and suggestions as to how to integrate this into your business.

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3D Investing

Following a threefold philosophy of doing good, avoiding harm and leading change, find out more about 3D Investing’s evidence-based audit approach.

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