Responsible investment beyond the coronavirus
How the investment community can help advance the environmental gains that have come out of COVID-19.
The consequences of the coronavirus pandemic will clearly be profound, wide-ranging and long-lasting.
So, it’s no surprise that any sources of optimism to be found as the crisis unfolds are quickly seized upon. Perhaps the most significant so far has come in the form of the immediate effects on the environment.
Greenhouse gas emissions have fallen, while data from NASA suggests that air quality has improved dramatically as countries around the world have taken steps to restrict activity and travel.
Indeed, this could be an opportunity for organisations to rethink how they do business – and question whether they need to return to a form of normality in which, for example, employees are flown to meetings that could otherwise be held using video conferencing facilities.
A more realistic rate of change
Unfortunately, however, the environmental positives are likely to be temporary. Indeed, there is now a risk of efforts to address climate change becoming a lesser priority as governments focus on dealing with the economic implications of the crisis.
This is why the investment industry has an important role to play in maintaining the momentum that has gathered in recent weeks and months.
The biggest crisis now is clearly COVID-19, but the biggest crisis of the 2020s is still climate change, and we need to ensure that once we’re on the other side of the coronavirus pandemic that governments keep focusing on that.
But the environmental gains from the pandemic have clearly been made alongside painful social, economic and health consequences. In other words, the current rate of improvement is unsustainable.
If we’re taking climate change seriously, we would rather see a smooth transition at a rate less dramatic than we’re seeing at the moment. We don’t want to be in a position of having to bring a halt to everything, as we are now, in order to have that environmental impact.
We can invest for change
Responsible investing isn’t just about the environment, of course. The crisis has also shone the spotlight on corporate behaviours – both good and bad – and helped illustrate why businesses cannot simply be about making profits.
If they are going to be successful, they need to think about their wider stakeholders. Companies that have put measures in place for employees, for example, will come out of this with higher employee satisfaction and community spirit – and that contributes to their long-term success.
The importance of environmental, social and corporate governance (ESG) factors in investment decisions has only become clearer as the crisis has unfolded.
Investors increasingly seek information about sustainability and responsible investing, with growing awareness of the broader long-term aspects of successful and effective investing.
If you are interested in finding out more about responsible investing, or if you wish to discuss any aspects of your finances, please contact us or visit our website to arrange a no obligation consultation.
The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.
Based in Exeter, Fowler Financial Planning provides financial advice to individuals and SMEs in the local area, across the South West and in London. With an ever-changing environment and changing client circumstances, we feel it is essential to develop bespoke financial plans for clients to help them achieve their goals, and, more importantly, to review these plans regularly to monitor that they remain current and accurate. Fowler Financial Planning is a Partner Practice of St. James’s Place Wealth Management plc.
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Fowler Financial Planning is a trading name of Fowler Financial Planning Ltd, an Appointed Representative of and represents only St. James’s Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the group’s wealth management products and services, more details of which are set out on the group’s website www.sjp.co.uk/products. The ‘St. James’s Place Partnership’ and the titles ‘Partner’ and ‘Partner Practice’ are marketing terms used to describe St. James’s Place representatives.
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