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ESG Investing Financial Planning Investments

Sustainable Investing: the What, the How, the Why

Sustainable Investing: the What, the How, the Why

Sustainability is no longer about doing less harm. It’s about doing more good

5 min read

Many people have heard of ESG-SRI, including sustainable and impact investing. These words may seemingly appear around every corner, in every questionnaire and are growing in popularity. So, what exactly is it all about?

The What

It is important to first understand what these terms actually mean:

  • ESG” stands for Environmental, Social and Governance
  • SRI” stands for Sustainable (or Socially) Responsible Investing
  • “Impact investing” seeks to make a positive impact on the World, as well as using ESG and SRI principles at all times

ESG integration as an investment tool is very different from sustainable investing. While some ESG factors do describe aspects of company sustainability, its aim is to unlock factors that solely impact financial performance. For example, an excellent ESG integrated strategy may still invest in sectors that could be considered unsustainable – like tobacco manufacturers or fossil fuel extractors.

A potential issue, and definitely something to look out for, is ‘greenwashing’. This is where a company is making false claims about a product that purports to be environmentally conscious but is not actually making any notable efforts for sustainability at all. To avoid this, seek companies that display their sustainability ‘credentials’ in a clear and easy to understand manner, with no misleading messaging or imagery, backed up by data and compared to a suitable benchmark.

The How

ESG investing has three criteria:

  1. Environmental impact
  2. Social impact
  3. Governance

The environmental aspect looks at how a company impacts the planet by asking what a company does to reduce its harmful environmental footprint, utilise renewable resources and energy, and how it incentivises its employees to reduce their own footprint.

The social aspect questions how a company treats its employees, customers, suppliers, and the local community. This will analyse healthcare policies, compensation, employee working conditions, discrimination and more.

Governance relates to information about a company’s board of directors, business ethics and structure. Specifically, voting practices, independence, diversity, how new members are selected, how the company trades, levels of transparency, and so on.

Impact Investing seeks to make a positive impact by investing in companies whose products and services create positive impacts rather than just avoiding a negative impact. Impact investing also adds another element: the ability to measure the (global) effect of the investment.

This usually means that Impact Investors are more focused on creating a measurable impact on the World, even if it means foregoing a larger financial return possible elsewhere. It should be noted however that a lower financial return is far from being the norm nowadays from an Impact portfolio.

A lesser-known facet of ESG investing is to look for companies that are B-Lab certified as a B-Corp.  B Lab creates standards, policies, tools, and programs that shift the behaviour, culture, and structural underpinnings of capitalism.  Discover more about B-Lab’s work as a non-profit here.

The Why

There are clear reasons for the rise of ESG investing. Volatility in this sector has seen a great decline for investors over the last 5 or 6 years and it is now possible to obtain enhanced returns with reduced volatility risk in some cases. This is making ESG investments highly attractive as this sector develops further.

In addition, consumers and investors are holding companies accountable for their impact on environmental, social and governance factors against relevant benchmarks. This leads to the decision that a more ESG oriented company may deserve your money over a less ESG oriented company.

A record $649 billion poured into ESG-focused funds worldwide up to 30th November 2021. This was up from $542 billion in 2020 and $285 billion in 2019, making a 127% annual increase over just two years! In December 2021, Morningstar Direct estimated that global sustainable fund assets reached $2.7 trillion.

Sustainably Investing for the Future

ESG and Impact Investing should not be only for a select few. At Patterson-Mills, we believe in investing for a better future and making it accessible for all. To accomplish this, we offer tailored solutions from a carefully selective range of funds, fund managers, with rigorous analysis of appropriate criteria. Following an initial no-obligation meeting, we create a bespoke recommendation for our clients so as to successfully achieve their investment objectives.

Whether our clients wish to invest 100% of their available capital into ESG, SRI and Impact Investing fund styles, or maybe 25%, or perhaps initially none at all, we have a suitable offering available. However, the key is to be put into a position to make a fully informed choice, which at Patterson-Mills, we show all prospective clients. 

Our interests and those of our clients are one and the same, and so we only use proven, cost-effective, and tailored solutions in order to produce the most positive outcomes for our clients’ financial objectives.

Get in touch today and book your free no-obligation review meeting. You have nothing to lose and potentially lots to gain!

Send us an e-mail to edward@pattersonmills.ch, call us direct at +41 78 214 84 32, or fill in our contact form below.

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Financial Planning

Swiss Unemployment – The 2022 Position

Swiss Unemployment – The 2022 Position

The primary solution to avoid technological unemployment is by investing in human capital

3 min read

The subject of “unemployment” has been a hot topic throughout the last couple of years. Public health measures caused many new people to appear on the unemployment register. However, are we coming out the other side of this artificial increase in unemployment?

An Endless Cycle?

Unemployment is clearly felt strongly by not only those unemployed, but it also adversely affects the economy as a whole.

The ripple effect caused by people suffering financial hardship, and all that comes with it, negatively impacts consumer spending (one of the key drivers of growth in an economy) which can lead to economic recession or even economic depression, if left to grow. Lower demand means lower profits for business which can lead to redundancies and, thus, more unemployment. It is a downward spiral that once started can be difficult to stop.

However, unemployment has more effects than just financial woes. People will face challenges with mental and physical health, there could be an increase in crime-rates, and Government spending on benefits could become out of control and also reduce GDP.

Reversing the trend!

It is not all doom and gloom though. A vital part of escaping a downward spiral is business and consumer confidence. If people are confident enough to be willing to invest in developing the right skills an economy needs, then both jobs and so productivity can rise again. It is certainly can be a long-term problem once it arrives, but the challenge for Government to try to keep productivity and economic development sustainable, suitable and strong enough for the local needs of the Country concerned.

Coming out the other side?

In Switzerland, the unemployment rate measures the number of people actively looking for a job as a percentage of the labour force.

Unemployment in Switzerland is, happily, on a falling trajectory fell to 2.4% in March, which is down from 2.5% in February and 2.6% in January. In numbers of people, this relates to 109,500 people registered with the regional unemployment office, 8,470 fewer than in February.

From a January 2020 level of around 2.6%, followed by a peak in January 2021 of 3.7%, it would seem that unemployment is now on a steady reduction and on its way back to pre-2020 levels.

Switzerland's 2022 figures compared to toehr leading Countries

Comparing these latest Swiss figures with those of other Countries, we see unemployment in the UK at 3.8%, France at 7.4%, Germany at 5.4%, the U.S at 3.6%, and Spain at a whopping 13.33%. So, it is clear that Switzerland is a front-runner in having some of the lowest unemployment figures in the World, which is possibly a reflection of its strength in markets and very modern approach to sustainability, positively impacting the economy, as well the levels of employment.

Getting your finances back on track

Financial planners have long held the responsibility to support their Clients as they face threats to their financial well-being, especially through and after periods of unemployment. At Patterson-Mills, we realise that with employment on the rise once more, we have an important role to play with getting people’s financial situation in order.

If you have recently become employed or had to change roles due to these turbulent times, we recommend taking advice to make sure your financial future remains on track.

Get in touch today. You have nothing to lose and potentially lots to gain!

Send us an e-mail to edward@pattersonmills.ch, call us direct at +41 78 214 84 32, or fill in our contact form below.

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Saving for Your Child’s Future

Saving for Your Child’s Future

We may not be able to prepare the future for our children, but we can at least prepare our children for the future

1 min read

Many parents give their children a flying financial start by saving or investing throughout their childhood. A new survey1 shows mothers typically take the lead in this area, while cash remains disproportionately popular.

Mum's the word

The research shows responsibility for children’s savings is particularly borne by mums: 60% of those actively contributing to a child’s savings and investments were found to be women. Researchers noted that this fits a broader theme whereby women tend to connect investing to outcomes for their family more than to their own needs.

The survey also highlighted a drop-off in contributions as children get older. While 67% of new parents start saving or investing for their new-borns, this figure falls to 54% by the time children reach secondary-school age.

Cash is king?

The efforts of parents to save for their children is clearly admirable, but it is important to make that money work hard.

In a high-inflation environment, sticking to cash can limit the impact of parents’ saving, as the real value of cash savings is likely to be eroded over time. While not guaranteed, investment products have historically delivered better returns over the long term. It’s advisable to consider the options.

Find out what you can do to save for your child’s future. Get in touch today and book your initial, free, no-obligation meeting.

You have nothing to lose and potentially lots to gain!

Send us an e-mail to edward@pattersonmills.ch, call us direct at +41 78 214 84 32, or fill in our contact form below.

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1Boring Money, 2021

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Financial Planning Mortgages

Avoiding Collapse: Managing Your Property Chain in 2022

Avoiding Collapse: Managing Your Property Chain in 2022

1 min read

You’ve found your ideal property, you’re just about ready to exchange contracts, and then you get the call: your buyer has pulled out, leaving your own transaction in jeopardy.

Unfortunately, many property transactions are interlinked in this way, with the decision of one buyer having a knock-on effect on the whole chain, with the worst possible scenario seeing every single buyer losing out on their new home. However, there are actions you can take to speed up the process and reduce the risk of things going wrong.

Go Chain-Free

You can avoid a chain altogether by finding a seller whose own transaction isn’t dependent on the sale of their property. However, this does limit your options, so what steps can you take if you do find yourself in a chain?

Organisation, Organisation, Organisation

Getting your transaction over and done with as quickly as possible limits the chances of your chain collapsing. Be proactive in instructing your solicitor and other professionals, ensure you’re completing forms and sending them back as quickly as possible, and chase up any delays.

Rent for a Short Period

Depending on your circumstances, it may be possible to sell your home and rent for a little while so that you’re not dependent on a buyer. Likewise, if your seller’s transaction falls through, you may be able to ask them to rent on a short-term basis so that you can still complete your purchase.

Let Us Help

Another way you can speed up your transaction and protect your chain is by securing an agreement in principle with a mortgage provider before beginning your search. We can help you there!

Get in touch today and book your initial, free, no-obligation meeting. You have nothing to lose and potentially lots to gain! Send us an e-mail to charles@pattersonmills.ch, call us direct at +41 78 214 84 32.