Though Responsible Investing seems to be a hot topic these days, making sense out of the many options out there may seem like a daunting task. The terminology alone can be rather confusing, with terms such as sustainability, responsible investing and Environmental, Social and Governance (ESG) often being used interchangeably. Terminology aside, ultimately what is most important is what matters to you.

Nicolas de Skowronski, Julius Baer’s Co-Head Investment & Wealth Management Services says "Responsible investment is not an investment solution but an approach to generating financial returns in a way that’s in line with clients’ core environmental or social values. As individuals increasingly state that their individual values are becoming just as important as financial returns, we believe that it is of paramount importance to add an ESG dimension to the investment process.

Investors have different levels of responsible investment to choose from. Sustainable investing, the first level, involves selecting companies with leading ESG qualities that also promise to generate attractive investment returns. Impact investing, the second form, goes further by generating a measurable positive environmental and/or social impact. Finally, in some cases companies are required to work towards a specific ESG goal."

Though responsible investing seems to be a hot topic these days, making sense out of the many options out there may seem like a daunting task. The terminology alone can be rather confusing, with terms such as sustainability, responsible investing and Environmental, Social and Governance (ESG) often being used interchangeably. Terminology aside, ultimately what is most important is what matters to you.

Therefore, before you begin, it is helpful to sit with your relationship manager and determine where your personal convictions lie in relation to your investment objectives, and which of these should be given more weight in your decision-making process.

Is your primary financial objective to:

Invest line in with your values?
Perhaps you are concerned with protecting marine life and would like to support projects that remove plastics from the ocean. Or maybe you would like to ensure that girls have equal access to opportunities as boys. Investing in line with your values can be done either through impact investing – where you ensure a positive societal impact while also making a financial return – or by excluding companies involved in controversial activities.

Reduce Risks?
Certain non-financial risks, such as a textile company’s insufficient management of labour rights issues in its supply chain, can hurt financial performance in the long run. Investment strategies that identify such Environmental, Social, and Governance factors can help investors avoid these risks.

Seize opportunities?
Companies that are actively tackling global challenges such as climate change by developing renewable energy technology, for instance, are well-positioned deliver long-term economic benefits to investors.

No matter what your priorities and personal convictions are, we can help you find the approach that best suits your needs. Because how we invest today is how we live tomorrow.

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