We’ve seen a rising demand from investors in recent years, particularly younger ones, for funds that take commitment to environmental, social and governance (ESG) issues seriously. This increased pressure has led consumers, companies and governments to consider the impact of their activities and push for more responsible alternatives.
Smarterly has always taken a holistic approach with the products we offer, ensuring responsible procedures and processes are embedded throughout the whole investing experience. Signing up to the UN-backed Principles for Responsible Investment (PRI), which is quickly becoming the kitemark for responsible investment, allows us to further demonstrate this long-standing commitment to ESG issues.
As one of the first UK retail platforms to sign up to the initiative, we recognise the important role that pensions and savings play in responsible investing is huge and the biggest way to have an impact is to come together and align investment activities with the broader interests of society. The opportunities available now through leveraging the power of responsible investing are unequivocal. It has come down to the simple message that the more we are able to invest responsibly, the brighter the future looks.
With 500 signatories in the UK and 3,000 globally, and a combined AUM of USD$89 trillion, the PRI is the world’s largest investor initiative to promote and develop responsible investment. Its goal is for its signatories to incorporate ESG factors into their investment decisions to better manage risk and generate sustainable, long-term returns.
The PRI works to achieve this by encouraging adoption of the Principles and collaboration on their implementation; by fostering good governance, integrity and accountability; and by addressing obstacles to a sustainable financial system that lie within market practices, structures and regulation.
Everyone can feel and see the implications of climate change now ,from activists to governments and with net zero targets set for 2050, the pressure is on for an urgent transition. When it comes to ESG issues, collaboration is the golden word - this is a problem which can only be fixed by coming together as an industry. As part of this initiative Smarterly will also become a member of the PRI Wealth Managers Group which will help foster greater collaboration, bringing together similar parties to find ways to address the global issues.
In 2019, Smarterly launched the Ethical SmarterMix portfolio which allows investors to find ethical funds to invest in. The portfolio is restricted to underlying funds that have been screened by an ethical investing framework. Investors can view the details of all the underlying ethical funds that make up each SmarterMix portfolio to see where the funds are being invested.
Successful implementation of the PRI principles across the industry will significantly improve investors’ ability to meet their commitments to beneficiaries, as well as better align their investment activities with the broader interests of society. It’s no longer enough for financial markets to say that they recognise ESG factors, we need more action.