What’s More Important – Impact or Return?

By Rebecca Scaife

Published on: March 2, 2023

We’ve shared our thoughts about sustainable investing being only one part of the answer to the world’s sustainability challenges. The answer to these challenges lies with each individual and the actions that we collectively take. This spans many areas including the energy we consume, how we travel and maximising the efficiency of our homes.

Make no mistake though, we believe that sustainable investing is very important and will make a meaningful difference to the future of our world. The question for each of us to consider is, how important is investing sustainably to me personally? And what price am I willing to pay for it?

We know that every investor is different when faced with these important questions. While there are many aspects to consider, two of the main ones boil down to

  1. How important is sustainability in general to you as a personal value?
  2. How can we help you to identify how your investment decisions are aligned with your values, and determine your financial capacity for this alignment?

Sustainable Investing Spectrum

As with any spectrum, the end points are usually the simplest to explain. On the far left, we have investors who are completely agnostic to increasing social and environmental positive impact through their investments.

In returning to our two points above, this may be because the importance of sustainability is not a value they hold. While we as a company are of a different view, we recognise that each investor is fully entitled to their own views.

Alternatively, an investor may be agnostic because they may not have the financial capacity to be anything else. They may be of limited financial means and simply cannot afford to lose any investment returns in aligning with their sustainability values. It may not sit well with them, but “needs must”.

On the far right of the spectrum, we have people who are pursuing philanthropy as their focus in life. Sustainability is a dominant personal value, and they also have the financial means to suffer a full loss of their capital in the pursuit of making the world a better place. Warren Buffett, the legendary investor is a great example of this.

Through The Giving Pledge that he made is 2006, he committed to giving away more than 99% of his considerable wealth (in excess of $100 billion) during his lifetime or at death. His rationale is simply that, “Were we to use more than 1% of my wealth on my family, neither our happiness nor our well-being would be enhanced. In contrast, that remaining 99% can have a huge effect on the health and welfare of others.”

Now, along with the Bill & Melinda Gates Foundation, he is asking hundreds of rich Americans to pledge at least 50% of their wealth to charity.

Of course, many of the investors that we help every day are somewhere within the end points of the spectrum. And this is where the conversation gets really interesting. We help you to identify and articulate how important sustainability as a personal value is to you – in a very non-judgemental way. After all, this is your money that you are investing.  And then by examining your overall financial circumstances, we enable you to clearly understand your opportunity to align your investment values with your personal values.

There are different investment opportunities available at every point along this positive impact spectrum. Once we’ve identified your point on the spectrum, we can then introduce investment ideas that are aligned with your personal motivations.

To review your financial circumstances and discuss investment opportunities that are suitably aligned with your sustainability motives get in touch.

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