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What is Our Approach to Sustainable Investing?

Capital Partners
Capital Partners
Posted 13.08.2020 in Company News, Investment Planning
We see no conflict between promoting our approach to sustainable investment practices that impact positively on the future of our community, country and planet and a sound investment philosophy.

At Capital Partners, we actively participate in sustainable investing. That’s because socially responsible investment (SRI) aligns with our core principles by acting in our client’s best interests, investing to a fiduciary standard, and taking a long-term, sustainable approach to investing. We support our clients who choose to invest in a way that aligns with their social and environmental values, and our experience tells us that investors don’t need to sacrifice their values for good returns.

Our philosophy

We base all our investment decisions on an evidence-based philosophy that shows:

  • markets are an efficient way to allocate capital;
  • taking a broadly diversified approach is a better approach than picking sectors, stocks and funds in the hope of outperforming the market;
  • certain share market dimensions – company profitability, company size and relative price – can be systematically exploited to provide the investor with a higher expected return.

We then overlay this philosophy with an assessment of each investment’s performance in common ESG  (environment, social and governance) dimensions. These could include:

  • environmental considerations such as a company’s carbon footprint, impact on biodiversity, water and land use and opportunities in renewable energy, green building and clean tech;
  • social considerations like labour management and health and safety records, product quality and safety, or opportunities in health, nutrition education and housing;
  • governance issues including corporate governance, Board composition and remuneration, accounting standards, and any record of corruption or anti-competitive tactics.

Figure: Timeline of socially responsible investing – this is not a new concept.

 

We take an integration approach to SRI

Capital Partners favours an integration approach to SRI investing that allows us to combine our proven investment philosophy with ESG principles. This offers investors a broader range of investment opportunities – and is more cost-effective when compared with the active approach.

We have chosen to partner with global leaders in SRI investing whose investment beliefs align closely with our own. Our process avoids a black and white approach where companies are either included or excluded – it’s important to encourage companies to be part of the solution.  This ensures better diversification, and the potential to invest in asset classes that traditionally offer higher than expected returns – like smaller companies and value investments.

We believe every investor should be able to invest in a way that sits right with them. For many, this means investing in companies that practice social and corporate responsibility – contributing to the well-being of the society in which they operate, and on which they depend.

If you’re interested in investing along SRI principles, the key question is how to do this without compromising your desired investment outcomes. For example, how can you reduce your portfolio’s carbon footprint while maintaining enough diversification to meet your investment objectives and avoid unnecessary risk?

As an evidence-based advisory firm with more than 20 years’ experience, we believe that an integrated approach to SRI, which balances the need for investments with strong ESG performance and strong returns, is the best solution. If you’re interested in a truly integrated approach, it’s worth having a conversation with an experienced adviser rather than attempting to go it alone.

If you would like to find out more about socially responsible investing, and whether it’s right for you, Capital Partners can help.

Capital Partners
Capital Partners
Capital Partners
At Capital Partners, we understand that life is filled with ups and downs. It’s complex. Certainty is in short supply. But with tailored, objective financial advice – advice built on evidence and your values and life goals – you can set the path for living your best life, whatever fate and circumstance throw at you.

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