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Economy

Why we’re supporting Sustainable September: Alliance Trust Investments

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Several organisations are helping us organise and underwrite Sustainable September, the month-long celebration of sustainability that you can reserve your tickets for now, before they go on general sale.

We are asking each of them to tell us why they are supporting the event. Next is Alliance Trust Investments, which manages a range of investment funds under the banner Sustainable Future.

Why is Alliance Trust supporting Sustainable September? 

It has become clear that one of the main contributors to the financial crisis was a culture of short-term thinking, from which we are only just starting to recover. It led to pressure on companies to focus solely on short-term shareholder value, sometimes at the expense of other stakeholders (such as customers or broader society) and putting at risk longer-term returns.

Sustainable investors have long known that it is important to take into account more than just the immediate context of a company’s quarterly results. Increasingly, more people are coming to realise that the environmental, social and governance (ESG) issues are not just about ideals – they are about value as well. You only need to consider the recent floods in the UK, the furore over how much company bosses get paid or the fallout from last year’s horsemeat scandal to realise that these ESG factors can have a serious impact on the profits of the companies in which you invest.

Sustainable September is there to highlight the importance of these issues, with valuable insights from thought leaders, investors, corporations and entrepreneurs from across the country. As a company, Alliance Trust wants to be at the forefront of this movement towards a more sustainable future.

What do you hope to get out of the event?  

We hope that Sustainable September will push sustainability to the front of people’s minds and help to take a step toward changing people’s perceptions, particularly in relation to sustainable investing.

Currently, the most popular criticism of sustainable investing is that it means sacrificing returns. This is increasingly becoming untenable; indeed, Moneyfacts pointed out last year that ethical funds have outperformed their non-ethical counterparts over one year and three years, while sustainability issues are becoming more and more embedded in mainstream investment.

The factors that have brought this about are only going to become more important in the years to come, meaning that companies that operate more sustainably will be better investments in the long-term than those that don’t. It seems clear that sustainable investing is here to stay.

What does sustainability mean to you? 

We believe that there are three key elements encompassed within sustainability.

– Positive impact – there are many companies which are a real force for good. They help to improve quality of life, reduce environmental impact and manage their operations responsibly and with integrity. It may be a firm that makes technologies that lower carbon emissions, one that improves people’s lives through medical innovation or one that helps provide clean water. Companies with products or services that provide these solutions to the challenge of developing more sustainability are likely to grow more than the market and where these positive attributes are overlooked by the market can be good investments.

– Avoiding negatives – sustainable investing means not investing in companies whose activities damage the environment or have a negative social impact. As well as avoiding such firms, we believe that actively encouraging companies to change and improve their practices is an important part of sustainable and responsible investment (SRI). This process is called ‘engagement’.

– Real investment potential – we firmly believe that sustainable investing is a sensible approach from a pure investment perspective. Companies operating in a sustainable and responsible manner are better placed to succeed over the long-term.

Why should individuals and businesses consider sustainability?

There are a whole host of different factors making it more important for investors to take sustainability issues into account. As the world economy becomes increasingly globalised, a growing population and an emerging middle class in developing economies, which is clamouring for the good things in life, are colliding with limits to growth including food shortages, resource scarcity and environmental degradation.

On top of this, we are all having to deal with the impacts of extreme weather events, whether that is droughts in prime crop-growing areas in the US and Eastern Europe or floods at home and across Europe. These are becoming more frequent and more intense, with scientists increasingly certain that man-made climate change is behind these alterations to our weather patterns.

At the same time, ‘top down’ pressures are occurring. These are pressures from the other end of the economic chain – from us as consumers. In our connected world, people are now more aware of the impacts of their own actions – and the impact of the companies whose products they buy.

And now, social media allows people to do something about it and hold companies to stricter standards than they have in the past. That means businesses that are perceived to be acting in an irresponsible manner will be punished for it – recent examples include the demise of the News of the World, forced to shut in the wake of phone hacking revelations, and BP, which is still suffering the after-effects of the oil spill at one of its wells in the Gulf of Mexico.

It’s not just consumers and investors who are more aware of all of these issues – politicians and regulators are, too. Companies and shareholders have to consider not just the factors highlighted above but also how regulators and policymakers deal with them.

Academic studies support the view that more sustainable companies are more likely to be successful. A recent paper from the Harvard Business Review found that “high sustainability firms outperform low sustainability firms in both stock market as well as accounting performnance“.

Follow Sustainable September on Twitter (@SustSept), Facebook (facebook.com/sustsept) and through the dedicated LinkedIn group.

Further reading:

Introducing: Sustainable September

What is Sustainable September?

Register now for Sustainable September 2014

 

Economy

How Going Green Can Save A Company Money

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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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Economy

Report: Green, Ethical and Socially Responsible Finance

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“The level of influence that ethical considerations have over consumer selection of financial services products and services is minimal, however, this is beginning to change. Younger consumers are more willing to pay extra for products provided by socially responsible companies.” Jessica Morley, Mintel’s Financial Services Analyst.

Consumer awareness of the impact consumerism has on society and the planet is increasing. In addition, the link between doing good and feeling good has never been clearer. Just 19% of people claim to not participate in any socially responsible activities.

As a result, the level of attention that people pay to the green and ethical claims made by products and providers is also increasing, meaning that such considerations play a greater role in the purchasing decision making process.

However, this is less true in the context of financial services, where people are much more concerned about the performance of a product rather than green and ethical factors. This is not to say, however, that they are not interested in the behaviour of financial service providers or in gaining more information about how firms behave responsibly.

This report focuses on why these consumer attitudes towards financial services providers exist and how they are changing. This includes examination of the wider economy and the current structure of the financial services sector.

Mintel’s exclusive consumer research looks at consumer participation in socially responsible activities, trust in the behaviour of financial services companies and attitudes towards green, ethical and socially responsible financial services products and providers. The report also considers consumer attitudes towards the social responsibilities of financial services firms and the green, ethical and socially responsible nature of new entrants.

There are some elements missing from this report, such as conducting socially responsible finance with OTC trading. We will cover these other topics in more detail in the future. You can research about Ameritrade if you want to know more ..

By this report today: call: 0203 416 4502 | email: iainooson[at]mintel.com

Report contents:

OVERVIEW
What you need to know
Report definition
EXECUTIVE SUMMARY
The market
Ethical financial services providers: A question of culture
Investment power
Consumers need convincing
The transformative potential of innovation
Consumers can demand change
The consumer
For financial products, performance is more important than principle
Competition from technology companies
Financial services firms perceived to be some of the least socially responsible
Repaying the social debt
Consumer trust is built on evidence
What we think
ISSUES AND INSIGHTS
Creating a more inclusive economy
The facts
The implications
Payments innovation helps fundraising go digital
The facts
The implications
The social debt of the financial crisis
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Ethical financial services providers: A question of culture
Investment power
Consumers need convincing
The transformative potential of innovation
Consumers can demand change
PUTTING FINANCIAL SERVICES IN AN ETHICAL CONTEXT
An ethical economy
An ethical financial sector
Ethical financial services providers
GREEN, ETHICAL AND SOCIALLY RESPONSIBLE ISSUES IN FINANCIAL SERVICES
The role of investing
Divestment
The change potential of pensions
The role of trust
Greater transparency informs decisions
Learning from past mistakes
The role of innovation
Payments innovation: Improving financial inclusion
Competition from new entrants
The power of new money
The role of the consumer
Consumers empowered to make a change
Aligning products with self
THE CONSUMER – WHAT YOU NEED TO KNOW
For financial products, performance is more important than ethics
Financial services firms perceived to be some of the least socially responsible
Competition from technology companies
Repaying the social debt
Consumer trust is built on evidence
Overall trust levels are high
THE ETHICAL CONSUMER – SOCIALLY RESPONSIBLE ACTIVITIES
Payments innovation can boost charitable donations
Consumer engagement in socially responsible activities is high
Healthier finances make it easier to go green
SOCIALLY RESPONSIBLE COMPANIES
37% unable to identify socially responsible companies
Building societies seen to be more responsible than banks….
….whilst short-term loan companies are at the bottom of the pile
CONSUMER TRUST IN THE BEHAVIOUR OF FINANCIAL SERVICES COMPANIES
Overall trust levels are high
Tax avoidance remains a major concern
The divestment movement
Nationwide significantly more trusted
Trust levels remain high
CONSUMER ATTITUDES TOWARDS GREEN AND ETHICAL FINANCIAL PRODUCTS
For financial products, performance is more important than principle
Socially conscious consumers are more concerned
CONSUMER ATTITUDES TOWARDS TRANSPARENCY
Strategy reports provide little insight for consumers
Lack of clarity regarding corporate culture causes concern
Consumers want more information
THE ROLE OF FINANCIAL SERVICES FIRMS IN SOCIETY
The social debt of the financial crisis
THE SOCIAL RESPONSIBILITIES OF FINANCIAL SERVICES FIRMS
For consumers, financial services firms play larger economic role
Promoting financial responsibility
CHALLENGER COMPANIES AND SOCIAL RESPONSIBILITY
Consumer trust is built on evidence
The alternative opportunity
The target customer

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