Queen Elizabeth II 1926 - 2022

At Hampstead Wealth, we believe that companies that actively manage their Environmental, Social and Governance (ESG) impact are perfectly placed to generate positive returns.

Businesses that aim to create new technologies for a more sustainable future are prepared for the future.

Assisting clients to align their portfolios with their core values

With a key focus on cutting Co2 emissions, pollution and supporting a greener future, many individuals want to invest responsibly.

The decisions you make on a daily basis, such as reducing plastic consumption or choosing companies based on ethical choices are key to you, and as such, we believe that investors do not need to comprise potential future returns in order to invest responsibly.

Responsible investment is a burgeoning area of finance that has seen an increased demand for investment solutions from both retail and institutional investors.

This is a trend that is on an upward trajectory, with significant support from Government initiatives around the world.

The regulatory considerations

Client’s investments are coming under the regulatory spotlight following the implementation of the Markets in Financial Instruments Directive II, which was rolled out in January 2018.

The results of initial investigations have suggested that suitability assessments and other processes should incorporate systems that identify ESG preferences.

It has also been suggested that firms should put arrangements in place to ensure that ESG preferences are included in advisory and portfolio management processes.

Strategies

At Hampstead Wealth, we currently offer two strategies as a part of our RIS, depending on whether the main objective of your client is the avoidance of specific sector, or to support businesses that engage in responsible business practices, or to develop sustainability solutions.

Avoidance

The objective of the ‘avoidance’ strategy is to avoid businesses that are involved in gambling, tobacco, pornography, alcohol and armaments.

This is a specific requirement, with our assessment being based on restrictions to investment that relates to the five industries mentioned. We will continually monitor approved investments in order to ensure that the restrictions remain in line with the requirements.

We will also consider investments that may not have these restrictions, but that avoid these areas because of their focus.

In our regular meetings, we will request confirmation that the requirements are being met, ensuring to continually monitor investments.

Advancing

The objective of the ‘advancing’ strategy is to invest in funds that advance businesses, whether that is providing specific solutions to issues with sustainability, or those businesses that have defined corporate policies that relate to the ESG criteria.

The focus of this is to identify and invest in businesses that work towards a sustainable future, being based on a positive values assessment.

The Hampstead Wealth way

At Hampstead Wealth, we know it’s important to aim for a more sustainable future without sacrificing investment returns.

Our RIS is a part of our Centralised Investment Process (CIS). It introduces further stages to ensure that we assess both the reasoning for including an investment, as well as its suitability with the values-based system of our RIS.

Any investment is required to meet both of these conditions to be included, ensuring that the quality of our service is always guaranteed.

Responsible investment – the process

Assessing sustainability can be difficult. It may be that the environmental cause is apparent, but there could be a subjective element. There are a variety of ways to establish a responsible investment fund, but we don’t limit our research to one single approach, choosing instead to combine the entire spectrum.

That’s because these approaches are not mutually exclusive, with some funds incorporating more than one aspect, perhaps combining more positive sustainability approaches with negative screens.

We combine the core sections of responsible investment to form our RIS, including:

  • Engagement
  • Theme
  • Impact
  • ESG investment quality
  • Integrating ESG
  • Screening

The Hampstead Wealth approach

We aim to create portfolios that are diversified, with multiple assets that are risk-managed in order to meet the ‘avoidance’ or ‘advancing’ objectives.

  • Property – Investing in regional primary health facilities, relocating GPS into modern facilities
  • Fixed Interest – Bond funds investing in social bonds, with the proceeds financing projects with a positive social outcome
  • Equities – Focussing on themes that include sustainable infrastructure, demographics and the efficiency of resources
  • Alternatives – A portfolio of environmental infrastructure assets, divided between water, waste, solar and wind

ESG: The opportunities and risks

Environmental, Social and Governance are used to analyse an investment from a sustainability perspective.

The following are examples of each category:

Environmental – environmental and climate change issues. These include water, pollution, waste, deforestation, toxic emissions, clean energy, carbon footprint, energy efficiency

Social – Human rights, community, employment and labour laws. These include working conditions, health and safety, equal opportunities, modern slavery, child labour, supply chain issues, inequality, data privacy and community

Governance – This includes anti-bribery, corruption, audit issues, board diversity, remuneration, tax, cybersecurity, accountability and business ethics.

Integrating our services

We align our RIS with our CIS, meaning that the same level of monitoring and accountability is applied across every investment.

This is vital as it ensures that investment is in line with the values-based criteria of our RIS.

All of our Responsible Investment portfolios are administered by our Risk Management System, ensuring that every portfolio meets its risk directive.

For more information on our Responsible Investment Service, contact our expert team at Hampstead Wealth today on 020 8209 9299 or alternatively at info@hampsteadwealth.co.uk

Can we help?

    I am happy to receive newsletters and promotional information from Hampstead Wealth Management

    [recaptcha]

    If you would like to see full details of our data practices please visit our Privacy Policy and if you have any questions please email info@hampsteadwealth.co.uk.