ESG sustainability moves up the agenda for charities and their investment advisers, research shows

Date: 18 Jul 2024

Karen Jones

ESG and sustainable investment is set to become even more important for charity investment portfolio management putting pressure on advisers to enhance their credentials, new research shows.

Interest grows in sustainability investing

The study with senior executives at UK charities with a collective £4.074 billion of stock market related investments found 88% say ESG credentials are currently important when selecting investments for their portfolios with 26% saying it is very important.

Over the next three years 94% say ESG and sustainability investing will become more important when selecting investments with 16% saying it will become significantly more important. Just 6% questioned say its level of importance will not change.

Bringing pressure to investment managers

That will put pressure on investment management advisers working with charities, the research found. Currently around a quarter (26%) questioned say investment managers’ ESG credentials are very important when awarding investment mandates, with 60% saying they are quite important.

The importance will increase according to 97% questioned with 15% saying it will become much more important. Just 3% believe ESG credentials will remain at the same level of importance over the next three years.

Alignment with values and purpose

Nicola Toyer, Charities Director at Quilter Cheviot said: “ESG and responsible investment has become more important than ever for charity Trustees as they seek to align their investment portfolios to their values and purpose. In our view, this is now considered equally, if not more important than investment performance.

“The integration of ESG risk factors alongside effective stewardship is fundamental to our investment process and helps us to make better investment decisions for our clients. From a charity perspective, ESG goes further than that and often translates into ‘doing good’. Many charities wish to add a values-based overlay to the portfolio with the addition of ethical restrictions.”

It has built a reputation for delivering strong, sustainable performance over the long term by delivering bespoke portfolio management which recognises that every charity has unique values and objectives.

As one of the UK’s leading wealth management companies Quilter Cheviot focuses on a relationship-based approach to Financial Planning and Investment Management with the purpose of making a tangible and meaningful difference to clients and their families.

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