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Investment Insight Series – Responsible Investment Context

Investment Insight Series

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Now that we are working with Sarasin & Partners to provide our responsible investment option we wanted to highlight elements of the portfolios we think are of particular interest. Ahead of spotlighting individual companies, we thought it would be useful to work through a few key concepts and terms.  

First, we’d like to take a moment to look at the wider context of responsible investment and introduce the Environmental, Social and Corporate Governance criteria and the UN’s sustainable development goals.  

Environmental, Social and Corporate Governance (ESG) refers to the three central factors in measuring the sustainability and societal impact of an investment in a company or business. These criteria help us to better determine the future financial performance of companies (in terms of both return and risk) and form the basis of screening decisions to include them within an investment portfolio. ESG has now become a globally-recognised set of ethically defined parameters used by those pursuing responsible investment strategies.  

The Sustainable Development Goals (SDGs), also known as the Global Goals, are a UN-driven universal call for action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity by 2030. Adopted by all UN member states in 2015, there are 17 individual SDGs which together create a blueprint for achieving a better and more sustainable future for all. 

The image below illustrates all of the SDGs. Each specific goal has its own set of targets and indicators against which progress is measured.  

 
Sustainable Development Goals

Many businesses looking towards a more responsible future are using both the ESG criteria and the SDGs as a benchmark. Over the series of investment insights part of what we will be looking at is how individual companies within the Sarasin & Partners responsibly managed portfolios measure up against these standards.