Responsible investment: Bigger than Brexit
The drive behind responsible investment won’t be knocked off course by Brexit.
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While EU legislation around climate change and reporting has been important, responsible investment is a global trend.
Leslie Gent, head of responsible investment at Coutts, says, “We decided to become a responsible investor because it was the right thing to do. Brexit won’t impact our determination to pursue an approach that protects the long-term interest of our clients.
“The United Nations Sustainable Development Goals are one of the most important frameworks for responsible investment worldwide. So a changing relationship with the EU won’t lead to any changes to the standards we’ve set so far.”
Bigger than government
Responsible investment isn’t just about legislation. The action of individuals and private organisations has been – and must be – just as important. This is most clearly shown in regard to climate change.
“We can see the passion of individuals in the climate extinction demonstrations this week or the determination of Greta Thunberg to confront world leaders with the facts of climate change,” says Leslie. “But it’s easy to forget that companies and corporations are collections of individuals, and many of these people share the concerns about the environment we see voiced on the streets.”
Worldwide, companies representing $39 trillion of market capitalisation – or 72% of the MSCI World Index, by value – have publicly expressed support for tackling climate change, including 75% of the energy sector. (Source: UN Principles of Responsible Investment)
Half of this support comes from US companies, and the ‘We Are Still In’ movement is further evidence of how private organisations in the US have taken on the responsibility of combatting climate change, even as their government steps aside. When President Trump announced in 2017 that the US was stepping away from the commitments it made on carbon emissions as part of the Paris Agreement, many US companies and civil authorities stepped forward to reinforce their commitment to the emissions goals, regardless of official US policy. Signatories now include 2,208 companies and investors.
“All of this shows how sustainability concerns transcend politics,” says Leslie. “From individuals to investors to corporations, people are side-stepping or ignoring government action to take control of the agenda and deliver sustainable policies on their own accord.”
Bigger than Coutts
Responsible investing is a global effort, and Coutts is just one of many companies working together to make sure investors have the opportunity to contribute to a better world. We’ve added our name to a number of groups to ensure our efforts have maximum impact. These include:
The PRI is the world’s leading proponent of responsible investment. Coutts is one of over 2,450 investors who have signed up to the six Principles for Responsible Investment, a voluntary and aspirational set of investment principles that contribute to developing a more sustainable global financial system.
An investor initiative to ensure the world’s largest corporate greenhouse gas emitters take necessary action on climate change.
An international effort to develop consistent climate-related financial risk disclosures that companies can use to inform investors, lenders, insurers and other stakeholders of their exposure to climate change.
Aims to enhance the quality of engagement between investors and companies to help improve long-term risk-adjusted returns to shareholders. You can find our Statement of Compliance with the code on our website.
We’ve engaged Hermes EOS to help us encourage responsible behaviour in the companies in which we hold direct public equity holdings through voting and engagement.
Working with these organisations and the support of our clients, we hope to help create a sustainable future for everyone. Because we understand that preserving and growing our clients’ wealth is not enough – we’re also responsible for helping to create a world worth living in.
When investing, past performance should not be taken as a guide to future performance. The value of investments, and the income from them, can go down as well as up, and you may not recover the amount of your original investment.
The issues addressed by responsible investment are bigger than politics.
While Brexit has the potential to change our political relationships with international partners, the impetus for responsible investment is increasingly coming from companies and investors rather than regulators.
As one of those companies, Coutts has joined up with partners across the globe to help promote responsible investment principles.