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Your investments are our first priority

Investing in change

Your investments are our first priority

But we’re also conscious about their impact on the world we live in. That’s why the shares and funds the Personal Portfolio Funds invest in are responsible investments – and they have been since 2016. 

By embracing responsible investing, you help the planet and could help your long-term returns, too. 

That's why at the start of the year we committed to reducing the carbon footprint (carbon emissions) of our funds: 

  • By 25% by the end of 2021 (on equity holdings)
  • By 50% by the end of 2030 (on all holdings)

What is responsible investing?

It’s an investment approach that Coutts, the investment manager for the Personal Portfolio Funds, uses for all the shares and funds they select.

Responsible investing focuses on companies and industries who positively affect our world in three key areas: environmental, social, and governance (ESG):

Environment

Put simply, this looks at how companies you invest in impact the environment. Think low carbon emissions, water usage, and encouraging attitudes towards climate change, sustainability, and renewable energy.

Social

How the companies help to move society forward –by looking after their staff and data properly, by considering all health impacts, and avoiding unethical labour practices and controversial supply chains.

Governance

This area looks at companies’ attitudes towards equality and diversity, executive pay, tax, and leadership. It also considers bribery controls, health and safety procedures, and shareholder rights – all to help ensure a fair and stable market environment.

Why ESG factors are important for investments

These factors are not based on moralistic beliefs, they make good financial sense. 

That’s because there’s a strong link between stock price performance, and companies who have good corporate practices.

Environmental, social, and governance (ESG) factors are also important drivers in the creation of long-term shareholder value. They should deliver better and more sustainable outcomes for society.

Does responsible investing affect returns?

Market data tells us that by being a responsible investor, you could potentially reduce your downside risk and see a positive impact on your returns.

Whenever there is a market shock, for example, statistics show that those invested in products that consider environmental, social and governance (ESG) factors have lost less money – and over the long term, have made more.

By understanding ESG risks, you could see a positive impact on your returns. Here are some examples:

Enviromental factors

Environmental factors

In 2018, the UK government announced an environmental policy to ban the sale of new petrol and diesel cars and vans from 2040 onwards.

Social factors

Social factors

Companies who do not treat their customers, employees, and suppliers fairly increase their risk and investment potential.

Governance factors

Governance factors

In 2015, a car giant was exposed after rigging 11 million diesel vehicles to pass emissions tests. When the news finally broke, the company saw a drastic 37% reduction in their share price.

How reponsible investing is part of our DNA

As a bank, we want to be climate positive by 2025 – so you can see that we take the environment as seriously as we take responsible investing.

Now, we’ve already made big changes – including significantly reducing energy consumption in our branches, and sourcing 100% of branch electricity from renewable sources – but we need to go further.

What's in it for you?

A little peace of mind, knowing that you have invested in funds that care and the reassurance that your financial returns today don't negatively impact the environment and society over the longer term.

You’ll also have an investment manager that considers all the possible factors available – to help give you the best chance of securing your financial future.