The results of the latest research report compiled by international family office Stonehage Fleming have revealed a gap between the mind-set and implementation of responsible investing. The Four Pillars of Capital Report: The Next Chapter showed that while over 75% of ultra-high net worth families acknowledged a preference for responsible investment, only 21% are actively incorporating a values-based approach in investment portfolios.
This contrast is likely attributed to a confusion about the wide range of SRI (Socially Responsible Investment) products on offer by asset managers, says Reyneke Van Wyk, Head of Stonehage Flemings’ Investment Division in South Africa. While respondents demonstrated an increasing interest in SRI, which aims to generate specific social or environmental benefits in addition to financial returns, they also confessed that on a practical level it was not as easy in the traditional investment world to do ‘good’ while also generating benchmark-beating returns for investors.
“Historically, investors have primarily been concerned with the end rather than the means, putting portfolio performance as the primary focus,” said Van Wyk. “However, as was highlighted in our Four Pillars of Capital report, this attitude is changing. For many families and private investors, the gap between investor and investment is closing.”
Considering the variety of socially responsible investing philosophies open to todays’ investors, Stonehage Fleming believes that Environmental, Social and Governance (ESG) investing marries well with a traditional investment management approach and with the long-term investing approach of UHNW* families.