INVESTMENTS

So, what is Impact Investing?

Impact investment seeks to make a measurable social or environmental impact alongside a financial return. As a concept, it has been around for about 10 years and is gaining prominence as a way of doing good with invested funds. To further tackle climate change and invest in the sustainable economy of the future, impact investors are investing in companies that are producing renewable energy, developing green technologies, sustainably managing forests, or applying innovative business models that combat climate degradation. The fund management industry is providing investment opportunities to the growing number of people who are interested in pulling their assets from investments that are part of the problem and allocating them to businesses that are generating solutions.

Almost 75% of the investors…

…who responded to the GIIN 2018 Annual Impact Investor Survey said they are seeking to address climate change through their investments. These investors are indeed motivated by climate concerns, but many also see this as just smart business. Investing without regard for social and environmental effects has contributed to the climate crisis we find ourselves in today. No doubt, we are already seeing a transformation in how companies need to do business in this new world—a world where we have better information about the effects of business decisions on the planet. How investors adapt and own their role in building a sustainable economy for the future will likely be a key indicator of whether they too will thrive or face extinction.

Individual Savings Account (ISA)

Your ISA can be a rather dull tax-free savings account or it can be a stunningly useful tool in your financial plan with the potential for big positive environmental impact.

An investment into one of our portfolios of your annual maximum ISA allowance of £20,000 could reduce CO2 emissions, generate renewable energy and contribute to social justice, alongside many other positive impacts.

What most people understand about ISAs is two things:

1. The interest paid on a cash ISA is tax-free. Whilst this is good, with interest rates as low as they are the tax saving is minimal. Also, there is a big risk that price inflation is far higher than the interest rate you get paid so your money loses value in terms of its purchasing power.

2. With a stocks and shares ISA, the capital gains made over time are free of capital gains tax. Again, whilst this is useful for all but the bigger savers, any gains are usually within annual CGT allowances anyway.

The real power of ISAs is that the dividend income on the underlying investments is tax-free. The average dividend on the FTSE100 has been over 3.5% for the last 10 years. Although the shares have gone up and down in value the dividends have been relatively stable. Returns from bonds can be even higher and more stable. ISAs have the potential to generate much higher tax-free income than bank interest.

With a possible input of £20,000 per annum or £40,000 for a couple, you can quickly amass a large pot that has the capacity to grow tax-free and/or throw-off a tax-free income. It is vital that ISA allowances are used every year that you can afford to since the allowances are “use-it-or-lose-it” in each tax year.

Our impact investment hierarchy

PORTFOLIO CONSTRUCTION

From around 30 funds, a selection of eight risk-graded funds are constructed to align with your risk profile and needs.

Funds are only included that make a material positive impact in relation to the UN Sustainability Development Goals, and robust investment processes that are likely to continue providing above-average investment returns.

ANALYSTS

After a qualitative and quantitive analysis, this is further reduced to a shortlist of 350 funds.

ANALYSTS

Our analysts use the leading tools to eliminate funds that do not meet our environmental, social and governmental criteria.

THE PLATFORM

A platform allows for the consolidation, management and easy viewing all of your investments.

Our impact investment hierarchy

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Positive Impact investments

Investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return.

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Ethical and Green investments

Ethical or socially responsible investing is any investment approach which seeks to consider both financial return and social and environmental impact to bring about social change. 

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INDIVIDUAL SAVINGS ACCOUNT (ISA)

Your ISA can be a rather dull tax-free savings account or it can be a stunningly useful tool in your financial plan with the potential for big positive environmental impact.

Risk warning:
As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

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