Guidance For Completing Our Green ESG Investment Questionnaire

ESG – Environment Friendly, Socially Responsible and Corporate Governance investing is becoming increasingly popular.  Indeed, as part of the Paris Climate Agreement, many countries have already committed to becoming carbon emissions neutral.

The British Government has gone even further by making it law to be carbon neutral by 2050 as well as setting tougher targets to dramatically reduce emissions by 68% by 2030 and 78% reductions by 2035.

This has filtered down to pensions and investment companies as well as financial advisers, where we are required to raise the issue of ESG and reduced emissions investing with you.  Part of this process is we offer an ESG questionnaire for clients to voluntarily complete.  You do not have to complete the questionnaire if you do not wish to.

Four Options:

Your have four options for each sector:

• Totally Exclude meaning these areas will not be considered
• Happy to Invest meaning these areas will be considered
• Progress in Sector meaning you are neutral i.e. sector may be considered for Funds and Firms progressing towards ESG
• No Strong Views meaning you are happy to invest in the sector

The Sectors to Include/Exclude:

A. Areas with Positive Impact

B. Areas with Negative Impact:

• Animal welfare
• Environment
• Human welfare
• Corporate governance

C. Industries with both Positive Impact and Negative Impact

• Energy, fossil fuels, mining
• Financial services
• IT and communications
• Manufacturing
• Property and construction
• Retail and sales

D. Socially Responsible Projects

Be Thoughtful With Exclusions

If your decision is to totally exclude all negative factors then the likelihood is there will be none or even just 1 or 2 funds available to you currently.  Most businesses and individuals will struggle to reach carbon neutrality or even negative in the short and medium term. 

Most of us still have a need for cars, electricity or travel and will do so for many years.  We had a client recently exclude ‘combustion engines’ yet they have two cars on their drive.  Another excluded power and banking so we asked how would they survive without power and where they intended to keep their money. 

Some areas we are all quite rightly exclude such as Human Rights and Oppressive Regimes but we suggest consider selecting ‘Making Progress in Sector’ rather than ‘Totally Exclude’ for many sectors to ensure there are some funds available.