Blue & Green Tomorrow hosted a Sustainable Investment Bootcamp for financial advisers on May 22 in Liverpool.
The second of six bootcamps this year attracted a number of interested advisers. Generously hosted by Quilter Cheviot at its 5 St Paul’s Square office in Liverpool, four leading funds presented in-depth knowledge and described a range of areas that sustainable investors are interested in.
Blue & Green Tomorrow founder and publisher Simon Leadbetter kicked off the event by giving a comprehensive overview of a number of social and environmental threats we face. He showed that the world is actually shaped by finance and that good investment decisions can contribute to a better future. Moving on to future trends, he said we need to be prepared for a more environmentally-conscious generation to enter the investment market. He concluded that sustainable investment provides the chance to increase client loyalty while improving the reputation of the business through transparent practices and satisfied investors.
George Latham, managing partner from the leading sustainable investment boutique WHEB, was the first of four speakers. He started his presentation with the question, “What is wrong with the fund management industry?” Latham explained how markets are too often beset by short-termism and that “terminology, pseudoscience and sales patter” often take too much space in an industry where the focus should be on long-term opportunities and more fundamental investment research. He showed that analysis which goes beyond a narrow financial focus can take account of vital information that makes for good investment decisions.
After him, Neville White, head of socially responsible investment (SRI) policy and research at Ecclesiastical Investment Management, took over and showed how to “accentuate the positive(s)”. Ecclesiastical, whose strategy is based on nine positive investment pillars and run by a charity, has pioneered in SRI since 1988. White explained how important it is to engage with people and how over-diversification can become an ethical problem. Ecclesiastical’s focus is on healthy, long-term investment which results in outstanding customer satisfaction and a relationship built on trust.
After a well-deserved coffee break, Mike Appleby, SRI analyst at Alliance Trust Investments, echoed the strong need for more interaction between investors and fund managers, highlighting how important it was for fund managers to be transparent on their ethical positions, as well as disclosing all the companies they hold. He kicked off with a number of interesting examples of bad attitudes in finance, which too often restrict good investment decisions, including the difficulty of factoring in slow, longer term trends – as many sustainability issues are. Appleby said that the cost of carbon will rise in an effort to cut carbon emissions. Also, the free services that nature provide such as water, air, nutrient cycles, pollination services and so on would too big to meaningfully contemplate for most mainstream investment bank economists, and yet they accept it is real and will affect asset prices. He concluded that in a world where nature is, in effect, our holding company, and society is there to be served, not exploited, we must not ignore environmental and social issues. It is for this reason that the Alliance Trust Sustainable Future funds invest solely in sustainable companies.
The host, Claudia Quiroz, investment director at Quilter Cheviot, completed the presentations. She explained how the convergence of three macroeconomic drivers – namely climate change, resource scarcity and population growth – will result in a new economy which will drive further innovation and efficiency. Quiroz gave a passionate introduction of why it is important to move towards more sustainable investment. She said it is irrelevant, from an investment perspective, to argue whether climate change is real or not – there are well-established companies offering the solutions to the environmental problems that we face to deliver more with fewer resources and within a carbon constrained environment.
The advisers in the room were then shown data from Blue & Green Tomorrow’s latest Voice of the Adviser survey. The report surveyed around 400 financial advisers about a range of issues –from their opinions on sustainable investment and the economy to Scottish independence and the timely debate over whether the UK should remain in the EU.
Following this, the audience was divided into two work groups with two funds in each session, which allowed delegates to quiz the investment houses as well as share their own thoughts on sustainable, responsible and ethical investment.
Blue & Green Tomorrow’s Liverpool event was the second out of six bootcamps taking place all over the country in 2014 – and it followed on from previous events in London and Leeds in being a resounding success.
On June 26, the bootcamp moves to Edinburgh. For more details on attending one of the five future events, see here.