Investing Responsibly

brooks
by EAMONN DORLING Dip PFS

For simplicity in making a few points I will focus on the impact that electric vehicles might have over the next nine years. Many will be aware the UK Government has pledged to no longer allow new cars that feature a diesel or petrol engine after the year 2030 (hybrid vehicles may continue for a further five years).

Therefore, the most likely change will be that soon a new car will be electric, although other solutions are potentially possible. Again, for the sake of simplicity allow me to assume the first scenario.

Existing manufacturers of vehicles have been working towards this for several years, but they will probably need to adjust some of their timelines. Of course, they could just carry on producing vehicles that will not comply – what do you suppose will happen to those companies and their share price?

On that basis, investment will be needed, and investors in those companies will need to satisfy themselves that the business plan is sustainable and will yield profits that make shareholding worthwhile. Loans to companies will need to be on the basis that the company will pay interest throughout the period of the loan.
That is one aspect of investment research.

Then some other filters need to be applied; they might include:

  • How does the company treat their employees?
  • What is their policy on diversification and equality?
  • What is the net impact of their carbon footprint in relation to UK objectives?
  • What environmental impact will the organisation have?
  • What are the core values of the organisation?

Maybe you would expect a company to stop once the profit calculation exceeds the pass mark. In future, this will no longer be enough – organisations, investors financial advisers and pension companies (to name a few) will all
be held to account across wider issues than a balance sheet.

I can think of one manufacturer featuring fantastic vehicles with few gripes more substantial than the quality of their door handles where the staff exit reviews are throwing up all sorts of issues. This could finally end up on the balance sheet – so when selecting your investments make sure your adviser is totally switched on to environments, social and governance (ESG) investments – because the landscape is changing.

Issued by Wealthline Limited, which is authorised and regulated by the Financial Conduct Authority. Past performance is not a reliable indicator of future results and any forecast is not a reliable indicator of future performance. The information contained in this editorial should not be construed as offering investment or tax advice.

Brooks Wealth is a trading style of Ampris Limited who are an appointed representative of Wealthline Limited, Registered in England 08761632 (Registered office: 8a Cowgate, Peterborough). Wealthline Limited are authorised and regulated by the Financial Conduct Authority, FCA number 684319.

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