Socially Responsible Investing

Socially responsible investing (SRI) can incorporate a wide range of environmental, ethical and social factors and is an increasing area of interest for our clients. Could you also use your wealth to make a difference to the world in which we live in today, as well as the world we are leaving to our children and grandchildren?

Avoiding investments in climate-unfriendly sectors of the economy is one obvious approach, but this isn’t the only green investment strategy, or necessarily the most effective. The largest polluters have the greatest capacity for improvement and so a number of leading institutional investors prefer instead to engage with these firms’ management teams, as major shareholders, in order to effect positive change.

Many SRI funds adopt a policy of ‘positive screening’. This method does not fully exclude companies in any specific sectors (eg. oil), but instead concentrates investment in those businesses in all areas of the economy that are doing the most to reduce their carbon emissions.

A more environmentally aware approach to investing is only one of a number of factors that contribute to a socially responsible wealth management policy and a number of green investment funds have no specific policy on other areas of interest to many investors with a social conscience. These might include companies involved in weapons, gambling, tobacco and so on. Other factors such as responsible employment practices and sensitivity towards the communities in which a business operates are also often important considerations.

SRI investing will normally involve some compromises and so it’s important to identify the primary driver for any investment you might be considering, as this will shape our recommended investment policy in each case:

  1. Investment growth – a return on capital
  2. Impact investing – a return of capital
  3. Philanthropy – a tax return

Based on your overall financial plan, you may like to allocate money to each of these ‘pots’, based on your own particular financial circumstances and objectives.

Overall, however, we firmly believe that it should be perfectly possible for you to do well, financially, at the same time as having a positive social impact.

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Tel: 01803 864 092


Pilot Financial is a trading name of Pilot Financial Planning Ltd, which is authorised and regulated by the Financial Conduct Authority, and Pilot Financial Consulting Ltd.

The Financial Conduct Authority does not regulate all products and services on this website.

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