Ethical & ESG Investments
Whenever there is a moral debate, people often ask: ‘How can I make a difference?’ They feel disempowered and confused when bombarded with horrific images about the reality of modern life and its ramifications.
ESG stands for Environmental, Social, and Governance. Investors are increasingly considering these non-financial factors as part of their analysis process to identify material risks and growth opportunities. Some fund managers are setting up their own screening processes to take into account the company’s carbon footprint, their social impact and the environmental benefit of the products.
Ethical Investments are slightly different as they tend to avoid investing in such areas as:
- Human rights abuse
- Animal exploitation
- Armaments and nuclear weapons
- Factory farming
You might be investing in these, inadvertently, if you have Life Assurance, a Pension, savings etc.. Do you know if you are? Would you like to? More and more people are becoming concerned about the activities of companies in which their money is invested, either directly or through financial institutions such as banks and insurance companies.
Most people are under the impression that by investing in an Ethical fund, they will be soothing their conscience but not making any money. This is not always the case as some ethical funds have been producing better returns.
Enterprise Investment Schemes & Venture Capital Trusts
These investments are becoming more attractive as efficient tax planning tools. The tax benefits, which include Income Tax Relief on the amount invested, Capital Gains Deferral and Exemption have been granted to provide incentives to investors to encourage them to invest in small, unquoted companies. The qualifying investments also benefit from Business Property Relief and can be used for Inheritance Tax Mitigation.
We make clients fully aware of the potential risks involved rather than solely focusing on the tax planning benefits of investing.