Mid-Year Investment Outlook 2019 | The Power of Influence
We are focused on generating consistent returns in a responsible way to help create a more sustainable future for you and generations to come.
10 min read
Investing for a low-carbon economy
A 2018 Report by the Principles for Responsible Investment (PRI) highlighted he following steps investors can take to invest for a low-carbon economy.
MOHAMMAD KAMAL SYED
Head of Asset Management, Coutts
Achieving your goals
Whatever your goals and aspirations, the right financial plan is an invaluable tool for achieving them. Finding a wealth manager who you can trust to work towards your objectives is just one part of the decision.
Partnering with an adviser who really understands you is just as important. We know that the financial affairs of our clients can be complex. When it comes to building a clear financial strategy, that takes account of both your long-term goals and day-to-day needs, our knowledgeable and experienced team can help you shape your future.
weathering a changing climate
The choices we make about our environment today have the potential not to just to affect investment returns but to severely limit the choices open to future generations. To help protect our freedoms, and to ensure the long-term future of our investments we have to think differently.
Engagement and assessment are powerful tools for investors to reduce the negative effects of climate change in the companies they invest in. As we become more aware of what action can be taken to minimise the harm potentially caused by climate change, we can increasingly look to support these steps through our investments.
What Are The Risks?
Climate change presents several specific risks that investors need to address in their portfolios.
Individuals and organisations are increasingly going to court seeking damages in relation to companies' action in relation to climate risk.
One big successful challenge could pave the way for a large number of claims seeking reparations based on historical emissions and activity, leading to costly pay-outs
National governments and international regulators are setting tough targets for reducing greenhouse gas emissions. The costs of meeting these targets will be met largely by companies.
Diverse decisions are good decisions
At Coutts, we're addressing diversity in two ways - engagement and assessment
For a number of years, Hermes EOS has been pressuring Anglo-Australian mining company Rio Tinto regarding the lack of diversity on its Board. They recommended voting against the appoinment of three male non-executive directors (NEDs) in early 2017 as this resulted in only two female directors out of 12. Following continued engagement, a new female NED was appointed in February 2019. The company has a target of 33% female representation by 2020 which it will fill once vacancies become available. These might feel like small steps but if we can help improve board diversity in an industry like mining, we can do it anywhere.
As the latest step, with a specific focus on diversity, we have now started to assess the diversity of the investment team of funds that we are analysing and investing. We will asess the male-female ratio of investment teams at the start of our analysis and then track changes to this ratio as part of our monitoring and review process. Our hope and expectation is that, by merely asking the questions, repeatedly and persistently (and conveying Coutts' views on the benefits of diversity), we will do our bit to trigger change in the fund management industry.