Most of us heard the famous line from the film Wall Street “Greed, for lack of a better word, is good” This may have been the mantra of the swinging 80's investment world – brick phone carrying, champagne swigging yuppies in power suits..
In contrast, later on in the film, we heard it said: “The most valuable commodity...is information” - That line never gets old and is as relevant today as shoulder pads were then.
So how do we reconcile these two vastly different statements? The good news is that we don't have to.
In a post-Covid aftermath, these quotes are a poignant reminder of the fragmented nature of investing and reveal two distinct approaches that can achieve the same outcome.
Now that the crisis is cautiously showing signs of easing and investors are re-evaluating their priorities, it is clear that we may have turned our vision away from ourselves. As a result the 'greed is good' message has been replaced with altogether different one. Words such as socially responsible, environmentally friendly, sustainable, ethical, fair – point to a world where 'information IS the most valuable commodity'.
Fundamentally, the prospect of future-proofing investor returns whilst ensuring that governance and social responsibility take the front seat is surely as rewarding as it is desirable. Long gone are the days when one could not survive without the other. Returns and altruism are no longer mutually exclusive.
If sustainable funds have been outperforming traditional funds and supporting underlying beneficence – the post-Covid landscape may well change if this trend continues.
At its most basic, ethical investment strategy is guided entirely by our own character, here the moral, social, spiritual and cultural compass take centre stage.
There are many prongs to this strategy. The most common one is 'avoidance' where the objective is the exclusion of undesired companies or causes, which may include firearms or fossil fuels.
Different approach focuses on inclusion. This seeks an active and practical strategies, where businesses practice positive social or environmental work, such as alternative energies, climate change or even human rights.
The upshot is that ethical investing is not only changing our landscape, literally and figuratively, it is empowering investors to 'put their money where their heart is'. Thus championing their individual and unique values whilst helping to shape the world to be a better, more balanced place.
Sustainable investing has the potential to shape our future and our planet's future with our money. It is, for lack of a better word, good! If we stop supporting values which may no longer align with our goals, we need to make use of the most valuable commodity which is information.
Silvia Johnson Bsc(Hons), DipPFS, EFA, CertCII (MP) is a Director and Independent Financial Adviser at Royale Thames Wealth Ltd
020 87207249 / 07908 109 741
Royale Thames Wealth Ltd is an Appointed Representative of New Leaf Distribution Ltd which is authorised and regulated by Financial Conduct Authority number 460421. Your home may be repossessed if you do not keep up repayments on your mortgage. The value of your investments may go up as well as down and the value is not guaranteed. Past performance is not a guarantee of future performance.