Green Reflections

Socially Responsible Investing

Just as I was catching-up with the overnight markets last week, I became aware that instead of my usual companion (a seagull my colleagues have named Steven) looking curiously at me from the windowsill, there were large numbers of police vehicles gathering around the square. I later discovered, this was in preparation for the much publicised “Extinction Rebellion” protest, happening later that day.

Regardless of the rights or wrongs of the protest, it led me to think about how Ovation can help individuals. Those who feel they want their wealth to make some difference to environmental or wider society causes via their investment strategy. Historically, we have always had a percentage of clients who wish to invest on a strictly ethical basis. More recently, there seems to be a growing desire, particularly from the millennial generation, to make a positive impact. By targeting their investment strategy towards a more sustainable approach. This might include environmental, social and governance themes, commonly abbreviated in the investment world as ESG

An increasing number of fund management companies are signing up to the United Nations Principles for Responsible Investment (UN PRI). There are six principles in total, targeted at corporate investors and intended to incorporate ESG issues into investment practice. Many fund managers now include ESG in their basic stock analysis. With the aim of improving performance potential. However, it is both voluntary and aspirational. Although there is an overlay of social consciousness, the financial return is the overriding concern.

Examples of ESG

Climate changeWorking conditionsExecutive pay
Waste and pollutionHuman rightsBribery and Corruption
Animal welfareHealth and safetyBoard diversity/gender
Resource depletion (including water)Employee relations and diversityPolitical lobbying, conflicts of interest


The terms Socially Responsible Investing (SRI) and Impact Investing, both have similarities to ESG and include many of the same themes. SRI goes much further than ESG by applying negative screening to stock selection. This enables investors to avoid companies or practices not aligned to their values. While positive screens can help them identify topics they want to support.

“Negative screening” selection could typically be:

  • Avoidance of tobacco
  • Alcohol and armament producing companies
  • Those that are involved in fur or animal testing
  • Countries with a poor human rights record.

“Positive screens” can include:

  • Environmental sustainability
  • Alternative/clean energy
  • Companies with good social governance, gender equality etc.

Impact investing is a way of targeting an investment with the intention of making a positive, measurable, social/environmental impact, together with a financial return. The investments can be made in both developed and emerging markets, they typically cover topics such as renewable energy, sustainable agriculture and healthcare.

In response to the growing interest, Ovation has developed a series of strategies to address a wide range of subjects. However, we can also offer bespoke solutions for individuals with more specific requirements. As an employee-owned business, we like to think that our values are pretty much aligned to sustainability and social well-being. In our own small way, we try to do our bit for the environment by recycling just about everything we consume. It’s disappointing therefore, to see a plastic margarine tub on the balcony outside my window! I don’t suppose you know anything about that do you Steven!!!?

Bob Mills – Investment Manager


The value of an investment and the income from it could go down as well as up. The return at the end of the investment period is not guaranteed and you may get back less than you originally invested.

Blog: August 2019

We welcomed Paraplanner Paul Wells on to the team.Click here to find out more, including the first record Paul bought and why he wanted to join Ovation. As you know the Ovation Team are trying hard to reduce our plastic consumption in the office. Paul shared with us a very simple, but great way we … Continued

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August 31, 2019

Episode 46 – The Sharing Economy with Professor Tim Kasser

Join Chris, David and Producer Tommo for part 2 of our interview with Professor Tim Kasser. This time the focus is on practical ideas for financial wellbeing through consuming less. They also have the added bonus of helping to save the environment! With listeners questions and a serious tip not to be missed in #tightasstommo we have a very interesting episode for you.

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