2017
Social Impact Investment – Avoid Harm, Do Good, Make Money
Murray McEwan / 0 Comments /
For the past 25 years I have been asking people what they want from their investments. The top five requirements have been:
- 100% security – I want my money to always be there if I need it
- Low volatility – I don’t want the value to go up and down too much
- High income – I want to earn more than inflation and deposit account interest rates
- High growth – I want to get back a good deal more than I put in
- Accessibility – I want to get my hands on my money whenever I need to
Of course your investment can’t do all these things at the same time – it’s a bit like telling an opening batsman to play attractively, score 4 runs an over and protect his wicket. So, a significant part of our job is to help you balance what you want from your investment with what is achievable and then to guide the selection of the right investments to make it possible.
At Flowers McEwan we added another option to these objectives by asking you whether or not you wanted your investments to be “ethical”. We last wrote about this in 2014, here.
Now we are stretching that question further. The “ethical question” used to elicit the response, “avoid harm”. It can now go further and pose the additional requirement, “do good”. Not only do people want an investment that will provide an income and that can be cashed-in when needed; increasingly they also want to see a positive social impact.
This is an exciting development. Mainstream fund managers who offer ‘ethical’, investments are now reviewing their funds to determine their level of positive social impact. Many refer to the UN’s Sustainable Development Goals as an independent yardstick.
There are also an increasing number of providers and products coming onto the market with more localised Social Impact products. Indeed the government has seen the value in this approach and offers tax relief on certain qualifying Social Impact investments. These tend to be less liquid (you can’t get your hands on the cash at short notice) and more risky, so we do not recommend them to everyone.
Flowers McEwan have always been at the leading edge of Ethical investment and now Social Impact investment. We are engaged in an ongoing systematic review of our Ethical portfolios and as the market develops you can expect us to bring opportunities to your attention.
David Flowers & Murray McEwan
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