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Trustee tips for responsible investing

Responsible investment can be a great opportunity to align your investments with your charity. But how do you marry up the vast range of investment possibilities with your charity’s financial future? Robert Seifert and Austen Speakman from Brooks Macdonald provide some helpful dos and don’ts to turn your goals into meaningful responsible investment actions.

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DO:

START WITH A BIG QUESTION!

Do you want to avoid certain sectors, or to support particular industries (such as ‘green’ energy?)

Broadly speaking, most responsible investment options can be categorised in one of these two ways. It’s also a helpful question to ask in terms of working out how responsible investment can align with your charity’s aims and purpose.

 

DON’T:

Write a Christmas list

Making a ‘wishlist’ of everybody’s opinions about responsible investment and what investments you’ve heard of that sound interesting is often how charities and other clients start. But it’s also the quickest way to dig a hole you may never get out of. In our experience, these lists tend to end up being pages long, contradictory and incoherent, and more likely to cause confusion than to point towards a solution.

 

DO:

Focus on your charity!

As trustees, you know and understand your charity’s purpose and background better than anyone.

Having asked yourselves whether your objectives are more likely to be exclusion-based or more supportive, think about how this could align with your charity’s aims.

For some charities the link may be obvious – if you are a health-orientated, an exclusion of tobacco companies would be logical. But for most, there will not be a clear sign-post, which is why it’s vital to look carefully at your charity as an anchor for your responsible investment goals.

 

DON’T:

Get side-tracked

Most individual trustees will have their own personal views about what responsible investment is or should be. We all do. While these are great for discussion, be brave enough to put them aside in order to focus on what makes most sense for your charity.

 

DO:

BE SELECTIVE

Can any of your charity’s aims be grouped together under headings (for example “environment”, “health” or “society”)? Are some more important than others?

It’s better to have a short set of clear points – it could be just two or three - whether positive or negative, that you can link back clearly to your charity, than three A4 pages of vague ideas.

 

DON’T:

Ask Alexa

You can’t google “responsible investment” and expect to find the perfect solution for your charity. The range of responsible investments is vast and the terms and language used can be opaque. Your adviser or consultant can help you understand the options and direct you towards choices that are likely to be best for your charity.

And finally,

DO:

ASK FOR ADVICE!

Whether you use an investment consultant or a financial adviser, they can help you turn your responsible investment aims into a reality. Having decided on your broad goals and obtained a general feeling for what sort of mandate might be appropriate, your adviser can take you to the next level by discussing the funds and services that might best fit your charity’s investment requirements.

Whatever your charity and your investment objectives, we think these tips should be a useful springboard for helping you take your charity’s responsible investment ideas from aims through to implementation.

If you like what you’ve read or have any questions, please get in touch:

 

Robert Seifert, Senior Investment Director

robert.seifert@brooksmacdonald.com

Austen Speakman, Portfolio Director

austen.speakman@brooksmacdonald.com

Kevin Addison, Head of Sales

kevin.addison@brooksmacdonald.com

 

Important information

The value of your investments and the income from them may go down as well as up and neither is guaranteed. Investors could get back less than they invested. The information in this document does not constitute advice or a recommendation and investment decisions should not be made on the basis of it. Brooks Macdonald is a trading name of Brooks Macdonald Group plc used by various companies in the Brooks Macdonald group of companies. Brooks Macdonald Asset Management Limited is authorised and regulated by the Financial Conduct Authority. Registered in England No 03417519. Registered office: 72 Welbeck Street London W1G 0AY. More information about the Brooks Macdonald Group can be found at www.brooksmacdonald.com.

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