ESG’s transition to the mainstream

Impact investing is no longer ‘niche’, according to Mona Shah, Director of Stonehage Fleming Investment Management, responsible for the firm’s Global Sustainable Investment Portfolios and Global Sustainable Equity Fund which was launched in November 2020. “The Fund has already attracted over $95 million in assets from private and professional investors, clearly demonstrating a demand for global sustainable equity strategies”, she told guests at the Spotlight Private Wealth: ESG and NextGen event hosted by Jersey Finance on 9 March.

“Families aren’t just talking the talk,” said Mona. “They are allocating assets and that increase in demand is driving the transition.” It is not only the millennials behind this shift, Mona added: “When sustainable investing was first accelerating it was seen as a space for the Next Generation. That is not the case for us now. Matriarchs and patriarchs are stepping forward”.

The reasons for this growing appetite for ESG investing, said Mona, are to do with education. “Before, families weren’t sure where to start – how to define their values and how to manifest them in their portfolios”.

Another factor is that sustainable funds have worked hard to eradicate greenwashing so the menu of choice for clients is growing. “ESG has become a balance sheet issue – companies are now being judged both on profit and impact performance by investors and consumers alike”, said Mona.

“ESG also offers a great framework for families to find a shared purpose – both for their capital and themselves. Sustainability is a great place to start for those trying to build a common language and define their values. To be authentic you have to be open and honest – not just about positive outcomes but by defining and measuring the negative impacts of a portfolio too”.