Use Fund EcoMarket to match clients'aims to SRI styles & strengthen your due diligence in the process.
When it comes to ethical, sustainable, environmental and impact investments (SRI), the world is your oyster. SRI here is used to describe the whole ESG, responsible and sustainable investment market. The last few years have taught us the extent of the damage we caused our planet, which we are still discovering, the importance of improving its health, and the swift actions we need to take now. Happily, we have been inundated with the revised governmental agendas to improve our ecosystem. This has led to an influx of new funds and strategies in the field of SRI, forcing us to all learn a new language, peppered with jargons and acronyms. We have a lot to care about and a lot to work towards, to remedy the past and reduce further damage. The asset management industry is helping those efforts with the introduction of new investment instruments and new funds with ever so slightly different nuances in their approaches, adding to the countless already in existence.
IFAs and professional investors bear the brunt of ploughing through these funds, tasked with finding the correct fit of sustainable investments that match their client's aims and objectives whilst keeping abreast of upcoming regulations. I recently completed the PIMFA ESG Academy certification and I highly recommend the course for the practical assignments and the step-by-step guides to help identify who is interested in the field of environmental, social and governance issues and to finding out clients' key areas of interest and concerns. A great stepping stone into the world of sustainable investments which may at times feel complicated and where Fund EcoMarket comes in to add value!
Fund EcoMarket is a unique, free to use (fund manager sponsored), ‘whole of SRI market’, information tool to help you to understand and compare the many different SRI fund options. The uniqueness of Fund EcoMarket is that it focuses entirely on presenting the ‘ethical’ aspects of investment funds rather than performance of funds or risk ratings. It is a great add-on to your usual fund due diligence process if you are seeking to expand your portfolio and diversify into the Environmental, Social and Governance (ESG) and sustainability fields. You can also download brochures which you can share with your clients and use the online questionnaires giving you the additional support in your fact-finding endeavours.
Fund EcoMarket aims to bust industry myths and jargons, keep you up-to-date with manager research, regulations, and sign up for and listen to events hosted by fund managers and most importantly help easily identify funds and place them under their correct style buckets for asset allocation and portfolio construction purposes. The database allows you to search funds by name, by region, by product and geographies among other fields. The most prominent and useful search field is the SRI styles field which will speed up your search process.
Fund EcoMarket has identified 8 SRI Styles which would cover most of the market.
Sustainability themes - (1) Sustainability, (2) Environmental and (3) Social
Values led - (4) Ethical, (5) Faith Based
Tilted - (6) Sustainability Tilt, (7) ESG Plus
Limited - (8) Limited Exclusions.
The sustainability, environmental and social funds concentrate on sustainability themes (often with ethical exclusions), environmental themes (may have exclusions) and social issues (many have exclusions) respectively and they may have stewardship and engagement activities. Ethical refers to having an ESG focus with exclusions, positive selection and/or stewardship activity. Faith-based is intended for investors of a specific faith. Sustainability tilted is where sustainability is integrated into research and may invest in all sectors with a tilt towards companies with higher standards. ESG Plus can be a fund level or company wide and applies to companies that excel in the integration of ESG into their research to go above and beyond to capture risks/opportunities and build additional SRI strategies.
Whatever your clients' needs, or whatever your level of knowledge, I say take a look at the Fund EcoMarket and use the search function, sign up for the newsletter and the You Tube channel. Please feel free to comment below.