Do Good, Avoid Harm, Make Money

The Positive Pennine Portfolios are designed to Do Good, Avoid Harm, Make Money. Sustainable and Responsible Investing is an overarching term to describe investing in areas that do some good in the world, whilst also avoiding harm. Being investments, they must also make investor’s money.

Doing Good

Investing in firms or projects that do good is very specific. The reason or major objective of that organisation must be to do good. A firm that makes widgets, but does this in a way that is carbon neutral, would not qualify. If the business objective was bringing clean drinking water and modern sanitation to third world people, this would qualify.

Solving the problems of the planet has been defined more clearly, by the United Nations and their 17 Sustainable Development Goals.

Avoiding Harm

Many investors want their portfolios to be placed where they can avoid the bad stuff. This can be subjective. One person’s definition may be different to another’s!

The major industries to avoid include, Arms and Weapons, Pornography, Gambling, Tobacco, Fossil Fuels, such as oil and coal.

More recently debated is how to categorise major multinational internet firms who avoid paying Corporation Tax by creating headquarters in offshore tax havens such as Luxembourg and Dublin. If we do include them in any of our portfolios, this will be flagged up to investors.

Making Money

All investors want to make a return commensurate with the amount of risk they are able to accept. Sustainable and Responsible Investing has over the decades and in most western markets provided a return over the longer term at least equal to the typical traditional investments.

So why is this important?

Increased investor focus on ESG (Environmental, Social & Governance) considerations.

Investors are becoming increasingly aware of how their money is invested and how the companies they invest in deal with issues such as human rights, employee wellbeing and how companies operate.   

As is the case in ESG investing, the governance factor covers the fund managers themselves meet with the companies concerned. They carry out site visits to witness first-hand the processes and people within the business. With this type of investing, being a shareholder is being a stakeholder, therefore they actively get involved in any voting procedures with regards to how a board of directors are operating. This could include voting on oil companies to encourage them to move to more use of renewables, voting on directors pay, or voting on how staff are treated.

Investors are seeking evidence that their money is used in an appropriate manner inline with their social beliefs.

Our research provides the evidence that the underlying companies within the funds of our portfolios, are clear and transparent on how they focus on ESG.

For a more detailed look at our investment process, click here.

For more information about the Positive Pennine Range of Portfolios, please contact Sean Fisher.

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