SRI Page

What is ESG investing?

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What is ESG Investing?

ESG investing is a criteria used to screen potential investments.

  • EnvironmentalAssessment of the impact companies are having on the planet today and in the future.
  • Social: Assessment of the social impact companies are having on people in the world.
  • Governance: Assessment of the structure, procedures and practices that control and direct a company.

Read more about ESG Investing and how we use ESG principles to screen our Socially Responsible Investment (SRI) funds.

How can I invest in green pensions?

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Sustainable investing is growing ever more popular due to the impact of climate change. Financial Advisor, Gary Davies, outlines the growing popularity and availability of investing in green pension funds.

Read more about Ethical Investing at Ellis Bates.

Ethical Investing

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By Kim Holding, Portfolio Manager

The world of ethical, responsible and sustainable investing is very fast moving and becoming increasingly complex. Not a day seems to go by without a new regulation or piece of legislation being proposed or enacted, to further promote sustainable practices, and hold businesses accountable for their impact on the environment and society.

How, then, can investors successfully navigate the landscape, and make sense of the information overload?

At Ellis Bates, our Investment Team has been managing Socially Responsible Investing (SRI) portfolios since 2008, demonstrating our deep roots in this area. To keep up to date with developments and filter out funds most worthy of our clients’ investment and trust, our investment process has naturally evolved over the years, more recently with the development of our SRI Framework. This Framework is a highly detailed tool that allows us to carry out an in-depth analysis on many factors including a fund’s alignment with the latest standards, investment philosophy, experience of the management team and engagement policies, to ensure the fund really is as ‘good’ as it says it is. As a living, breathing document, the Framework has undergone many developments and refinements since its implementation, and further revisions will be necessary as the landscape continues to evolve.

Utilising our Framework has allowed us to pinpoint several funds requiring further assessment. The most effective approach to clarify this information is to engage in discussions with the management teams – our well-established relationships with these teams significantly improves our access to valuable insights, enables constructive dialogues, and keeps us informed about their strategies and decision-making processes.

By way of illustration: this summer, our Framework brought attention to a fund in our SRI portfolios that exhibited notable exposure to UK water companies. Investors are no doubt aware that these companies have faced scrutiny in recent months due to their involvement in polluting rivers with sewage, and we recognise that addressing such negative environmental impacts is of utmost importance.

From our interactions with the fund’s management team, we established their beliefs and perspectives: a combination of events including outdated infrastructure (much of which dates to the Victorian era) and population growth (thus putting increased demand on this infrastructure) have contributed to these events. This can raise questions among observers as to why infrastructure dates back several decades, when investment in the industry has doubled since privatisation in 1989[1].

One area of criticism is that directors have allowed larger pay-outs to investors than on infrastructure investment. In economics, capitalism and socialism are opposing schools of thought: when capitalism is left unchecked, this can lead to inequalities and social injustices stemming from firms’ pursuit of profit. On the other hand, an anti-profit culture can result in a lack of dynamism in an economy, while failure by directors to make investor payments could violate their legal obligations under the Companies Act (which says, among other things, that they must act in shareholders’ best interests).

When capitalism or socialism is taken to an extreme, from an economic perspective, it can become necessary to restore balance. Indeed, water companies, regulators and government are responding positively to feedback from the Industry and Regulators Committee[2] who, following an investigation, have recommended measures to tackle these concerns. One example is providing new powers to regulator Ofwat, to closely monitor investment by the industry, and to hold firms to account[3].

Meanwhile, the fund’s management team is engaging with water companies to issue ‘use of proceeds’ blue bonds, where money raised is dedicated to specific projects such as upgrading infrastructure. The team – and we – continue to monitor the situation regarding pollution, while holding what they consider to be the most impactful names within the water sector, all of which should improve water security, and deliver better environmental and social outcomes.

We are reassured by the amount of time and research that the team has clearly dedicated to understanding this issue. Further, they have experience of engaging with companies on Environmental, Social and Governance (ESG) matters, thus fostering positive change and promoting sustainability.

Is it time to build a more ethical portfolio?

As awareness and interest in ESG factors continue to grow, the trend towards responsible investing will only strengthen. Starting a portfolio and filling it with environmentally, socially and governance-minded investments doesn’t need to be difficult. To find out more, please speak to us today.

[1] Ofwat, March 2022. Investment in the water industry. Retrieved from (Accessed: August 2023)
[2] UK Parliament, March 2023. Failures of regulators, water companies and Government leaving public and environment in the mire. Retrieved from (Accessed: August 2023)
[3] GOV.UK, March 2023. Government supports new Ofwat powers to tackle water company dividends. Retrieved from (Accessed: August 2023)

World Environment Day

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World Environment Day was created in 1972 by the UN General Assembly and is held annually on 5 June. The day encourages millions of people across the world to help protect and restore the Earth.

  • More than 400 million tonnes of plastic is produced every year
  • Only half of plastic produced is designed to be used only once
  • Less than 10 per cent of plastic is recycled
  • An estimated 19-23 million tonnes end up in lakes, rivers and seas
  • You can make green choices when it comes to your pensions & investments to help our environment

Speak to one of our Socially Responsible Investment Advisors

SRI has always been at the heart of our investment philosophy and we have a range of portfolios that focus on sustainable investment funds. To find out more about how you can invest responsibly, get in touch and speak one of our Socially Responsible Investment Advisors.

What is ESG investing

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In this video we take into consideration the social and governance side of ESG investing. We explore people and relationships, human rights, labour standards, employee engagement and gender and diversity.

Are you interested in sustainable investment funds?

If you want to find out more about ESG investing or our sustainable investment funds, please get in touch and speak to one of our ESG investment Advisors.

Environmental, Social & Governance

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Over the past few decades, there has been a growing interest and awareness in investing in companies that take into account environmental, social and governance (ESG) factors.

This type of investing – also known as sustainable, responsible or impact investing – aims to generate both financial returns and positive social and environmental impacts.

Sustainable investment funds

The origins of ESG investing can be traced back to the 1960s, but it was in the 1970s that the environmental movement gained momentum, with investors increasingly calling on companies to address issues such as pollution and resource depletion. And in the 1990s, corporate governance came into the spotlight following a series of high-profile corporate scandals.

ESG investing has its roots in the field of responsible investing (RI), which emerged as a response to growing concerns about the negative social and environmental impacts of businesses. RI investing initially focused on screening out companies with poor ESG records from investment portfolios.

Corporate behaviour

Over time, RI evolved into a more proactive approach that seeks to engage with companies on issues related to their ESG performance and influence corporate behaviour for positive change. This is often referred to as ‘active ownership’ or ‘impact investing’.

Today, ESG investing is a mainstream investment strategy used by institutional investors and individual investors alike. In fact, one in six investor respondents to a global responsible investing survey are committed to aligning their portfolios to net zero, with a further 42% intending to align their investment portfolios to net zero before 2050[1].

Responsible investments

While debate continues about whether doing well (financially) and doing good (morally) need not be mutually exclusive, the survey finds that more than two-thirds (69%) of respondents with exposure to responsible investments are satisfied or very satisfied with their returns to date.

Increasingly, investors are also reflecting more on what it means to be ‘responsible’. Specifically, many are actively considering what impact their investment approach can have on society and the environment. The survey identified one of the main reasons for including responsible investments in portfolios is the perception that they will lead to better risk adjusted returns when compared to ‘traditional’ investments.

Personal values

Investors’ concerns around major ESG issues continue to rise, and many are in the process of addressing at least some of these in their investment strategies. For some, it’s simply a matter of aligning their investments with their personal values.

Others believe that companies that manage ESG risks well are likely to be more financially successful over the long term. And still others see ESG investing as a way to generate positive social and environmental impacts.

How can you mix in ESG into your portfolio?

Climate change, demographics, biodiversity and the need for social justice are at the top of the agenda for many investors. The world of investment is catching up. An increasing number of funds now boast of their ESG credentials. If you would like to discuss how this could form part of your portfolio, please contact one of our ESG investment advisors for more information.

Important information: The value of your investments can go down as well as up and you may get back less than you invested.

Source data: [1] Aon’s Global Perspectives on Responsible Investing Report January 2022.

Adapting to climate change

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The impact of climate change has spurred many to take action and live more sustainably in the last 12 months.

Socially Responsible Investing (SRI) has always been at the heart of our investment philosophy and we spend time building our SRI portfolios, carefully considering various environmental and social elements of every fund before we invest.

To find out more about our sustainable investment funds and how you can do your part to help the planet, speak to one of our socially responsible investment advisors.

SRI environmental impact

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Investment Analyst, Jenny Farrell, explains the environmental impact on SRI portfolios. This is concerned with the conservation of the natural world and environmental criteria may include a company’s energy use, waste, pollution, natural resource conservation, and treatment of animals.

Get in touch with one of our ESG investment advisors to discuss how our sustainable investment funds can help you do your part for the planet.

Impact on climate change

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Climate Concerned? –  You can choose a Socially Responsible Sustainable ‘Green’ Pension Fund

Nearly two-thirds of people in the UK more concerned about climate change.

The impacts of climate change have been increasingly felt around the world in recent years. Governments, businesses and citizens alike are urged to take steps to reduce their environmental impact. The reality is that climate change is a threat to human wellbeing and the health of the planet.

Recent weather events, such as heatwaves, floods and fires this year, have made nearly two-thirds (60%) of people in the UK more concerned about climate change. A further 59% are also worried about weather reports from other countries, including in Australia and America, according to new research[1].

Wide choice of sustainable pension funds available

The good news is that there is now a wide choice of ‘green’ investment and pension funds available and these have grown in popularity over recent years as more people become aware of the climate crisis and its implications. These initiatives allow investors to allocate their capital into sustainable funds, which support businesses and projects that promote a cleaner environment and renewable energy for example.

UN climate summit

Two out of five (42%) people have said that the UN climate summits have made an impact on their climate change concerns – and 40% said that having children and grandchildren has made them worried about climate change.

This has spurred many to take action and live more sustainably in the last 12 months. Most popular planned changes include reducing plastic usage (71%), shopping locally (62%), driving less (53%) or buying an electric or hybrid vehicle (32%), and consuming less meat and dairy


You can choose pensions and investment funds to play your part in helping our planet

By choosing a ‘green’ pension fund(s), you can not only do your part to help the planet.

Ellis Bates Financial Advisers offer a range of sustainable investment funds for you to consider, avoiding unethical companies, while supporting those making a positive contribution to the environment.

If you would like to discuss your options with one of our socially responsible investment advisors, please get in touch.

The value of your investments can go down as well as up and you may get back less than you invested.

Source data: [1] Royal London surveyed 2,000 nationally representative UK adults aged over 18. Research was carried out by Opinium between 14 October and 18 October 2022.

Green pension funds

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Green pensions – does your employer offer pensions which are invested responsibly?

Research has found that 83% of the UK workforce view climate change as an important issue, with 72% saying that it was important their employer invests their savings sustainably.

Find out more about our sustainable investment funds and how we carefully consider various environmental and social elements of every fund before we invest.