fund ecomarket 2016
TRANSCRIPT
Good Money Week 2016
“Fund EcoMarket: bringing sustainability, ethics and investment
together”
Julia Dreblow BA Hons, Dip PFS
For information only.sriServices is not authorised to offer advice. This presentation is for use by UK financial services professionals only.Registered company - SRI Consultants Ltd, 03904843
Introduction
Who? sriServices’ aim is to grow ‘Sustainable, Responsible &
Ethical’ Investments 25 years in FS - previously Friends Provident, UKSIF
Director, NPI ‘Highly Commended’ - Corporation of London ‘Sustainable
City Awards’ 2015 (SF), finalist 2016. Shortlisted for two Investment Week SRI awards 2016
What? Online adviser friendly tools & support
sriServices.co.uk & FundEcoMarket.co.uk Consultancy, partnerships & media
Our topics...
An introduction to the diverse world of (what I call) SRI
Matching needs to options
Diversity illustrated
Tips on building this area into your processes
Why bother & what next?
A diverse market with unmet retail demand
Rapid & diverse international expansion UNPRI ‘s 1000+ signatories, manage over $60 trillion
worldwide Eurosif ‘Engagement and Voting’ assets exceed £1.434 trillion
2015 Impact Investor(.co.uk) c£36bn Worldwide 2014 $3.4 Trillion ‘Divestment’ fossil free campaign 2016
Highest ever retail net ethical fund sales UK 1.2% of total (source: IA) 2015 c£15bn Total FUM EIRIS, 2015
Potential demand c30-50% 43% of people would like to move money away from companies
involved in ‘unethical / unsustainable activities’ 34% of investors wanted to ‘help build a sustainable UK
economy'... (UKSIF, 2013) SLI 2015 Millennials research is similar
Diverse, dynamic & high profile issues
The diversity of issues makes this area complex to advise on...
• Ethical
• Social
• Environmental
• GovernanceTesco accounting issues (UK 2014)Rana Plaza disaster (Bangladesh 2013) BP Deepwater Horizon (Gulf of Mexico 2010) . VW governance issues (Germany 2015), Growing water scarcity
Different approaches
Funds approach issues in different ways...
Support
Avoid
Engage
‘Stranded Assets’ risk & the Bank of England (2015) comments. UN Global Development Goals (2015), Divest ‘go fossil free’ campaign, Tesla
The result?
ESG Integration
Responsible Ownership
Sustainability Theme
Ethically Balanced
Negative Ethical
Environmental Theme
Social Theme
Faith Based
Highlights diversity, focuses on ‘core commonalities’ – where options are ‘ethically similar’
A short cut to finding ‘ethically relevant’ options
Helps match ‘what a client wants’ to ‘what funds really do’
Noting: Variation within styles Crossover between styles Clients may need a ‘deeper
dive’
Meeting needs with ‘SRI Styles’...
Diversity illustrated: Fund EcoMarket snapshot October 2016
Negative Ethical (87)Ethically Balanced (89)Sustainability Themed (71)Environmental Themed (48)Faith Based (5)Social Themed (4)
Total: 349 entries (all regulated, retail onshore
funds plus some extras) 75 OEICs/UTs 21 ‘Corporate
Activity’ ‘Styles’ fund
breakdown opposite
OEIC options include: 7 UK10 Fixed Interest12 Mixed Asset22 Global4 Income
Fund EcoMarket survey responsesNo single fund caters for all...
Policies Features Corporate
Avoids Tobacco 38 Limited Exclusion policy
15 Publish Full Voting Report 15
Avoids Armaments Manufacture
40 Balances Pros & Cons / Best in Sector
22 Integrates ESG into all/most fund research
33
Climate Change / GHG policy 34 > 50% Large Cap 10 Reviewing carbon/fossil fuel exposure for all funds
15
Coal, Oil & Gas Majors excluded
30 RSMR Rated 29 In house voting expertise 16
Animal Welfare policy 33 Faith Friendly 10 Responsible ownership / ESG a key differentiator
16
Social policy 33 Positive Selection Bias 35 UK Stewardship Code Signatory 17
Sustainability policy 46 Eurosif Transparency 25 Vote all shares at AGM’s & EGMs
12
Measures Positive Impacts 16 Norms Focus 10 ALL OF THE ABOVE 0
Building this area into your business processes
Integrate this into regular processeseg products, % portfolio, reviews
Record your findings
eg - for reference, compliance & audit trail
Refine SRI research
eg - issues, attitudes, other factors
Identify key areas of interest
eg - issues, approaches, styles
Identify interested clients
Are you interested in ethical, social, environmental or faith related issues?
Fund EcoMarket - a free resource
1. Ethical / SRI information only
2. ‘SRI StyleFinder’ Fact Find Questionnaire
3. Fund filter options: Name, Investment Type, Product, SRI Style, SRI Policies, Other SRI Features, Corporate Activity
4. ‘Find Adviser’ button
5. Adviser Support area & links
6. Full report generation for audit trail
An adviser’s view...“… I think that your site is the missing link for many IFAs who are nervous/anxious about raising ethical investing with their clients.
It gives them a process and an audit trail – and I suspect many of those advisers who don’t raise ethical investing with their clients don’t raise the issue because they have no process in place if the client was to say that they did want to invest ethically.
This is what happened to me, and it was only because I wanted to offer ethical investing to my clients that I discovered your site through my own research.”
Bringing sustainability, ethics and investment together
Next steps:
‘Can you be sure to offer ‘appropriate’ advice without discussing personal values /SRI?’ Adviser ISO, changing values, growing interest
How can this area enhance your clients’ experience?’ eg for different groups of clients and interests (charity, pensions)
‘How can this area benefit your business?’ Younger clients, new recruits, changing opinions, reputation, trust ...
‘What changes do you need to make for this to be a success for you?’ Initial & supplementary fact finding
For further information:www.FundEcoMarket.co.uk@JuliaDreblow