Tuesday 25th October 2016                 Change text size:

Alliance Trust’s performance proves SRI is a sensible investment approach


Sustainable Future Equity Fund performance over the past 10 years: no evidence of sacrificing investment returns or increased risk, but still two opposing camps?

With regard to the returns and risk from SRI, there are two opposing camps.

The first camp believes that limiting your investments to those with better environmental, social and governance (ESG) performance simply reduces your choice of investments – as arbitrary an approach as investing in companies with names beginning with the letters M to Z. Limited choice equals fewer opportunities equals lower returns and higher risk (volatility).

The other believes that more sustainable companies make a better starting point from which to choose investments. Higher quality companies equals more predictable profits equals higher returns and lower risk (volatility).

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