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Sue Round and Ecclesiastical: pioneers in ethical investment



Sue Round is an ethical investment stalwart. Having joined Ecclesiastical Insurance Group in 1984, she’s managed the Amity UK Fund for almost a quarter of a century – making her one of the longest-serving fund managers in the business, and the fund one of the most established funds available to investors.

This piece originally appeared in B&GT’s Guide to Sustainable Investment 2012 (NEIW edition).

Financial advisers often pick out Round’s fund as one of the best performers on the ethical market, and it’s no wonder – her vast experience in the industry has been integral to its continued good returns, making Ecclesiastical one of the frontrunners in UK ethical investment.

She chatted with Blue & Green Tomorrow.

Tell us a little about your role at Ecclesiastical.

My role title is director of group investments and I run the fund for both insurance companies and our retail operation. In this particular case, it is the Amity UK fund – a fund that had been around for almost 25 years. We launched it in 1988, and it was the first of our range of amity funds. The Amity Fund range is a specialist range of funds that operate both negative and positive screening criteria.

Are the screenings weighted equally?

It’s easy to have exclusions and exclusions are very stressed so it is not as if you have to do anything other than avoid the areas that you state you will avoid, such as alcohol and tobacco. The flip side of that is the positive side where we look into companies that meet some of our key criteria, our nine pillars. Sometimes this means that your positive screens actually result in companies being excluded because they don’t meet a sufficient number of our pillars of positive criteria.

The reality is that positive screening is a much more dynamic tool, and really it is the thing that we think adds value to investments.

What would you say is the main objective behind your screening process?

The whole idea about investing with a positive screen is to give investors the best of both worlds. So, using an integrated approach to investment means that you weigh up social, environmental and governance issues within your financial stream. It’s not just looking at numbers, it’s asking about a company’s culture and what they’re doing to benefit the environment or support human rights, for example.

Over the long-term, if you incorporate these things into your financial screening, you will end up with a company that is much more rounded. It’s a much more holistic approach in making mere financials as your benchmark.

What kind of companies make up the fund?

The fund has invested in a mixture of predominantly UK companies and of that we have quite a large exposure, about 40%, of what I would call medium-sized companies and some smaller companies. Some have market capitalisations ranging from £50m up to £1 billion or so.

I don’t like highly-rated companies that don’t pay out much in dividends. We are, as a house, very keen on long-term investment varieties. We tend to look for values when we buy and we tend typically to hold our holdings for an average length of about seven to 10 years. That is extremely high compared with the industry average which is probably a year or less. So our turnover is very low – typically less that 20%.

What I am trying to illustrate here is that our approach is very much a sustainable one, in that we don’t believe in moving in and out of companies quickly for a fast buck. We believe in investing for the long-term and choosing companies that we can grow with rather than just taking a short-term outlook.

Ecclesiastical offers a number of non-screened funds such as the Higher Income Fund, which is not marketed as sustainable or ethical. How does the company ensure that sustainability is taken seriously in this instance?

We have four screened funds and two non-screened funds and at the moment we haven’t got any definitive plans to change those. But it is not something that we are avoiding. We operate the same approach bar to the negative screening.

When we are looking at investments, we take into consideration the advantageous aspects – in particular the corporate governance pieces. The person who runs the Higher Income Fund also runs a screened fund, so they are not operating in entirely different universes.

We are aware that having two funds that aren’t screened may look strange but we are totally committed to this area. It is an area that we have been in for over 25 years. It is part of our roots; we come from a background where many of our original direct investors were coming from a clergy background. The funds were originally designed to meet that demand. So we have covered that, and we are, like many others, totally committed to going forward with our principle idea and this is something that we have used as a kind of tagline for explaining our funds.

I really believe that you can have good long-term returns using this kind of criteria. So there is no doubt surrounding our commitment to the area.

On a more personal note, what inspired you to specialise in sustainable and socially responsible practices as opposed to investment more generally?

I don’t think that you can divorce the two. I was very keen, when we launched the first fund in 1988, to accommodate the views of our customers, who actually wanted a fund of this nature. At the time, back in the ‘80s, there was probably one other fund that operated but they were using just negative screening and I felt certainly that that was not the way forward, and that we ought to be looking at companies that were doing something very positive, be it through their product, their stature, their culture, their structures or the way that they treated their staff.

So we started with the view that it wasn’t just about neutral or negative screenings, but very much about looking for the positive aspects of a company. I was very pleased that we were the first to use the approach and over the years other people have followed because it makes sense to include these sorts of measured as part of your investment approach.

You’re one of the longest-serving fund managers. What would you say has been the highlight of your career at Ecclesiastical?

Obviously having good performance is excellent. Three or four year ago, we decided that we wanted to get a much more external focus on our funds and really start to make them more widely known.

We re-launched our whole proposition around the fact that we were ethical, responsible investors. I think that when we made that change, it was hugely satisfying for me personally because it is something that I have wanted to do for a very long time.

People have become so much more aware in the last few years of the importance of taking these matters on board. It felt like we didn’t know have to educate people in the way that you were.

Twenty-five years ago, companies didn’t understand the terminology. The whole evolution of sustainable investment has seen it become much more mainstream. And that has been picked up now by institutions who have, on the whole, become much more involved in the whole arena.

We are certainly not on our own anymore, although there has been some quite high-profile withdrawals from the sector from our peers. But like I say, some of these people were Johnny-come-latelies that simply jumped onto the bandwagon, but for us it is really in our DNA, being committed from the beginning. We are not going to walk away from this. Some companies see it just as another niche area, which is fine if they make those decisions; it just makes us more proud in a sense.

Further reading:

The Guide to Sustainable Investment 2012 (NEIW edition)


How Going Green Can Save A Company Money



going green can save company money
Shutterstock Licensed Photot - By GOLFX

What is going green?

Going green means to live life in a way that is environmentally friendly for an entire population. It is the conservation of energy, water, and air. Going green means using products and resources that will not contaminate or pollute the air. It means being educated and well informed about the surroundings, and how to best protect them. It means recycling products that may not be biodegradable. Companies, as well as people, that adhere to going green can help to ensure a safer life for humanity.

The first step in going green

There are actually no step by step instructions for going green. The only requirement needed is making the decision to become environmentally conscious. It takes a caring attitude, and a willingness to make the change. It has been found that companies have improved their profit margins by going green. They have saved money on many of the frivolous things they they thought were a necessity. Besides saving money, companies are operating more efficiently than before going green. Companies have become aware of their ecological responsibility by pursuing the knowledge needed to make decisions that would change lifestyles and help sustain the earth’s natural resources for present and future generations.

Making needed changes within the company

After making the decision to go green, there are several things that can be changed in the workplace. A good place to start would be conserving energy used by electrical appliances. First, turning off the computer will save over the long run. Just letting it sleep still uses energy overnight. Turn off all other appliances like coffee maker, or anything that plugs in. Pull the socket from the outlet to stop unnecessary energy loss. Appliances continue to use electricity although they are switched off, and not unplugged. Get in the habit of turning off the lights whenever you leave a room. Change to fluorescent light bulbs, and lighting throughout the building. Have any leaks sealed on the premises to avoid the escape of heat or air.

Reducing the common paper waste

paper waste

Shutterstock Licensed Photo – By Yury Zap

Modern technologies and state of the art equipment, and tools have almost eliminated the use of paper in the office. Instead of sending out newsletters, brochures, written memos and reminders, you can now do all of these and more by technology while saving on the use of paper. Send out digital documents and emails to communicate with staff and other employees. By using this virtual bookkeeping technique, you will save a bundle on paper. When it is necessary to use paper for printing purposes or other services, choose the already recycled paper. It is smartly labeled and easy to find in any office supply store. It is called the Post Consumer Waste paper, or PCW paper. This will show that your company is dedicated to the preservation of natural resources. By using PCW paper, everyone helps to save the trees which provides and emits many important nutrients into the atmosphere.

Make money by spreading the word

Companies realize that consumers like to buy, or invest in whatever the latest trend may be. They also cater to companies that are doing great things for the quality of life of all people. People want to know that the companies that they cater to are doing their part for the environment and ecology. By going green, you can tell consumers of your experiences with helping them and communities be eco-friendly. This is a sound public relations technique to bring revenue to your brand. Boost the impact that your company makes on the environment. Go green, save and make money while essentially preserving what is normally taken for granted. The benefits of having a green company are enormous for consumers as well as the companies that engage in the process.

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5 Easy Things You Can Do to Make Your Home More Sustainable




sustainable homes
Shutterstock Licensed Photot - By Diyana Dimitrova

Increasing your home’s energy efficiency is one of the smartest moves you can make as a homeowner. It will lower your bills, increase the resale value of your property, and help minimize our planet’s fast-approaching climate crisis. While major home retrofits can seem daunting, there are plenty of quick and cost-effective ways to start reducing your carbon footprint today. Here are five easy projects to make your home more sustainable.

1. Weather stripping

If you’re looking to make your home more energy efficient, an energy audit is a highly recommended first step. This will reveal where your home is lacking in regards to sustainability suggests the best plan of attack.

Some form of weather stripping is nearly always advised because it is so easy and inexpensive yet can yield such transformative results. The audit will provide information about air leaks which you can couple with your own knowledge of your home’s ventilation needs to develop a strategic plan.

Make sure you choose the appropriate type of weather stripping for each location in your home. Areas that receive a lot of wear and tear, like popular doorways, are best served by slightly more expensive vinyl or metal options. Immobile cracks or infrequently opened windows can be treated with inexpensive foams or caulking. Depending on the age and quality of your home, the resulting energy savings can be as much as 20 percent.

2. Programmable thermostats

Programmable thermostats

Shutterstock Licensed Photo – By Olivier Le Moal

Programmable thermostats have tremendous potential to save money and minimize unnecessary energy usage. About 45 percent of a home’s energy is earmarked for heating and cooling needs with a large fraction of that wasted on unoccupied spaces. Programmable thermostats can automatically lower the heat overnight or shut off the air conditioning when you go to work.

Every degree Fahrenheit you lower the thermostat equates to 1 percent less energy use, which amounts to considerable savings over the course of a year. When used correctly, programmable thermostats reduce heating and cooling bills by 10 to 30 percent. Of course, the same result can be achieved by manually adjusting your thermostats to coincide with your activities, just make sure you remember to do it!

3. Low-flow water hardware

With the current focus on carbon emissions and climate change, we typically equate environmental stability to lower energy use, but fresh water shortage is an equal threat. Installing low-flow hardware for toilets and showers, particularly in drought prone areas, is an inexpensive and easy way to cut water consumption by 50 percent and save as much as $145 per year.

Older toilets use up to 6 gallons of water per flush, the equivalent of an astounding 20.1 gallons per person each day. This makes them the biggest consumer of indoor water. New low-flow toilets are standardized at 1.6 gallons per flush and can save more than 20,000 gallons a year in a 4-member household.

Similarly, low-flow shower heads can decrease water consumption by 40 percent or more while also lowering water heating bills and reducing CO2 emissions. Unlike early versions, new low-flow models are equipped with excellent pressure technology so your shower will be no less satisfying.

4. Energy efficient light bulbs

An average household dedicates about 5 percent of its energy use to lighting, but this value is dropping thanks to new lighting technology. Incandescent bulbs are quickly becoming a thing of the past. These inefficient light sources give off 90 percent of their energy as heat which is not only impractical from a lighting standpoint, but also raises energy bills even further during hot weather.

New LED and compact fluorescent options are far more efficient and longer lasting. Though the upfront costs are higher, the long term environmental and financial benefits are well worth it. Energy efficient light bulbs use as much as 80 percent less energy than traditional incandescent and last 3 to 25 times longer producing savings of about $6 per year per bulb.

5. Installing solar panels

Adding solar panels may not be the easiest, or least expensive, sustainability upgrade for your home, but it will certainly have the greatest impact on both your energy bills and your environmental footprint. Installing solar panels can run about $15,000 – $20,000 upfront, though a number of government incentives are bringing these numbers down. Alternatively, panels can also be leased for a much lower initial investment.

Once operational, a solar system saves about $600 per year over the course of its 25 to 30-year lifespan, and this figure will grow as energy prices rise. Solar installations require little to no maintenance and increase the value of your home.

From an environmental standpoint, the average five-kilowatt residential system can reduce household CO2 emissions by 15,000 pounds every year. Using your solar system to power an electric vehicle is the ultimate sustainable solution serving to reduce total CO2 emissions by as much as 70%!

These days, being environmentally responsible is the hallmark of a good global citizen and it need not require major sacrifices in regards to your lifestyle or your wallet. In fact, increasing your home’s sustainability is apt to make your residence more livable and save you money in the long run. The five projects listed here are just a few of the easy ways to reduce both your environmental footprint and your energy bills. So, give one or more of them a try; with a small budget and a little know-how, there is no reason you can’t start today.

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