What I learned at The Values-Based Adviser Conference Leeds
My thanks go toRobin Powell of Regis Media, who helped to organise the event. I felt the day went extremely well and the questions and feedback we had on the day, from the advisers who attended was extremely valuable.
Leeds was a great place to hold our first event. I found a hot bed of advisers who have either already been having conversations about sustainable investing with their clients or were looking for a solution that fitted with their current, factor-based investment strategies. Here are some of the highlights:
Dr Reynolds presented a summary of the many challenges we face regarding sustainability including global warming, overuse of natural resources, loss of biodiversity, excessive waste, water scarcity, migration etc. He surveyed some of the responses that are being coordinated both globally and nationally by governments, regulators, central banks etc.
A significant challenge is how to communicate sustainability information to a wider audience. Investors need a simple tool to measure how their investments are doing in terms of sustainability. Dr Reynolds compared it with the effectiveness of the energy labels you see when you choose a fridge or a light bulb or any other electrical item. These sorts of simple messages can and have changed what people buy. The CISL is working with representatives across the financial industry to develop a dashboard that will convey how a fund is performing with respect to the Sustainable Development Goals (SDGs) that were agreed by world leaders and adopted by the United Nations in 2015. The dashboard distils the 17 SDGs into 6 themes covering resource security, healthy ecosystems, climate stability, basic needs, wellbeing and decent work. Dr Reynolds will be presenting again at our October conference in London and we will cover this in more detail at that event.
Most academics agree that high ESG scores and financial performance are positively correlated
It’s fair to say the jury is still out among the academic community as to whether sustainable investing produces higher or lower returns than mainstream investing. There is, however, growing evidence that firms with high ESG scores — i.e. firms with good corporate governance that act in a socially and environmentally responsible way — tend to perform better financially than those with lower scores. Garrett Quigley used the chart below to explain how the vast majority of serious studies on the subject confirm this positive correlation, which holds true for every region of the world.
Andrew Cain opened the event with a very brief history on sustainable investing, starting with ethical investing and a quick walk through the progression to Socially Responsible Investing (SRI) which was followed by Environment, Social and Governance (ESG). He will be writing a piece on the subject in the coming weeks.
The last five years, 2014–2018, rank as the five warmest years on record
Let’s face it, we hear warnings about climate change all the time, and they often go in one ear and out the other. We should all take time to read the evidence and let it sink in. The chart below is based on data from the National Oceanic and Atmospheric Association in the United States. According to the NOAA, nine of the ten warmest years since record began in 1880 have occurred since 2005. The last five years, 2014–2018, rank as the five warmest years on record.
As well as sustainable investing, we also learned about social impact investing.
Grace England from Resonance discussed the work that she and her colleagues are doing with social enterprises. As well as generating returns for investors, Resonance is helping to tackle pressing social problems such as unemployment, homelessness and social isolation. I must say, I didn’t realise quite how huge the social enterprise sector is. A report published in September 2018 showed that there are more than 100,000 social enterprises in the UK, contributing £60bn to the economy and employing two million people.
Reserve The Date Our next conference will be in London on Friday 25th October. We will be sending a full agenda and invite next week.
Reach us
Global Systematic Investors LLP
75 King William Street
London EC4N 7BE
United Kingdom
+44 (0)20 7717 5578
inquiries@gsillp.com
IMPORTANT INFORMATION
This document is issued by Global Systematic Investors LLP (“GSI”) and does not constitute or form part of any offer or invitation to buy or sell shares. It should be read in conjunction with the Fund’s Prospectus. GSI is authorised and regulated by the Financial Conduct Authority. The company’s registered office is 75 King William Street, London, EC4N 7BE.
The price of shares and income from them can go down as well as up and past performance is not a guide to future performance. Investors may not get back the full amount originally invested. A comprehensive list of risk factors is detailed in the Prospectus and an investment should not be contemplated until the risks are fully considered. The Prospectus can be viewed at www.gemini-im.com.
The contents of this document are based upon sources of information believed to be reliable. GSI has taken reasonable care to ensure the information stated is accurate. However, GSI make no representation, guarantee or warranty that it is wholly accurate and complete.
The GSI Global Developed Value Fund (“the Fund”) is a Sub-Fund of GemCap Investment Funds (Ireland) plc, an umbrella type open-ended investment company with variable capital, incorporated on 1 June 2010 with limited liability under the laws of Ireland with segregated liability between Funds.
The Company is authorised in Ireland by the Central Bank of Ireland pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2003 (S.I. No. 211 of 2003) (the “UCITS Regulations”), as amended.
Gemini Investment Management Ltd is the appointed Global Distributor and is responsible for the oversight of all distribution arrangements for the sub-fund. GSI are the appointed sub-distributor for the fund.
