Standard Life Investments

Investing with responsibility

01 October 2017

Investing with responsibility

We believe it is possible to invest in a way that helps address the world’s many social and environmental challenges, while still seeking a financial return. Such investment options have evolved considerably, from ethical investment and SRI (sustainable and responsible investment), to today’s most intriguing proposition – impact investing.

Taking a closer look, we articulate ethical investing as excluding companies based on their activities, such as those involved in arms trading, tobacco and gambling, among others. SRI primarily focuses on measuring a company’s approach to managing sustainability factors, including sustainable business practices. For example, this could mean avoiding companies that have polluted the environment, have poor health & safety standards or have breached the United Nations norms, such as involvement in controversial weapons.

Having a positive impact

Impact investing involves investing in companies, organisations and funds with the intention for those investments to generate positive social and environmental impacts, alongside financial returns. This exciting area of the market is growing in popularity among investors. According to JP Morgan research, demand for impact investing strategies could reach $1 trillion by 2020.

Environmental, social and governance (ESG) integration

Accounting for ESG factors in investment goes beyond bespoke values-based investment options. At Standard Life Investments, we believe ESG factors should be integrated across the investment process, including our own. This is based on the understanding that the ESG aspects of a company’s activities may be material to its ability to deliver long-term financial returns. ESG can be a useful management quality indicator, a risk assessment factor and an identifier of corporate stability.

Our experience

We have a dedicated ESG Investment team, comprising a number of highly experienced Responsible Investment and Governance & Stewardship specialists. They provide our investment teams with expert knowledge and insights on the material ESG issues affecting the companies in which we invest and the wider market. They also undertake in-depth research, analysis and engagement on any ESG issues relevant to our portfolios – to the ultimate benefit of clients.

An exciting range of funds

We offer a suite of values-based investment solutions, including ethical and SRI funds. This year, we are also set to launch our own impact fund – the Global Equity Impact Fund. This is a high-conviction portfolio of 35-60 stocks that we believe can deliver a financial return while having a meaningful and measurable impact on society and the environment.

The world of values-based investing has grown immeasurably, both in sophistication and importance. Investors, too, are increasingly looking to address the world’s problems through their investment choices. Thanks to solutions such as our Global Equity Impact Fund, that aspiration is now a reality.

The value of an investment is not guaranteed and can go down as well as up. An investor may get back less than they invested.