Ultra-High Net Worth Families Remain Committed to ESG Investment Approach in Post COVID-19 Market Environment According to Stonehage Fleming Report

21 October 2020 Stonehage Fleming
Carolyn Levin, Director at Stonehage Fleming Investment Management (SA)

Carolyn Levin, Director at Stonehage Fleming Investment Management (SA)

• 83% of respondents that apply ESG principles to their investments have not altered their approach despite impact of COVID-19

Research from Stonehage Fleming, one of the world’s leading international family offices, has found that ultra-high net worth (UHNW) families have remained committed to ESG investment, despite the impact of COVID-19.

The finding is contained in Stonehage Fleming’s report, ‘Four Pillars of Capital: a time for reflection”, an exclusive survey of 183 multigenerational members of different families and advisers (see ‘Methodology’).

83% of respondents that apply ESG principles to their investments have not wavered from this as a result of the pandemic.

“Demand for ESG investment strategies had been growing steadily before the pandemic, but it looks as though COVID-19 has really accelerated this trend. Socially responsible investment is on the cusp of becoming mainstream - far sooner than we had originally thought possible”, said Mona Shah, Director at Stonehage Fleming Investment Management (UK).

“Rather than simply trying to understand a company’s material ESG risks, we seek to generate specific, tangible and importantly, measurable benefits from the sustainable investments we make, as well as returns that are at least comparable with ordinary shares. There is an increased appetite for this approach as clients look to demonstrate their social capital in their investment philosophy, and measure their impact.”

Already 55% of respondents say they apply ESG or sustainable principles to their investment approach. Of those that do not already take ESG into consideration, 24% have said that COVID-19 will change their investment approach.

Graham Wainer, CEO and Head of Investments at Stonehage Fleming Investment Management (UK), said: “We are very confident that values-based investing can enhance returns, and are happy but not surprised to see that clients’ remain committed to ESG even during times of extreme market uncertainty.”

“We believe we can find excellent opportunities for our clients to use their investments to effect positive change in the way companies engage with the environment, communities and their shareholders.”

From a local perspective, Carolyn Levin, Director at Stonehage Fleming Investment Management South Africa commented, “Our South African clients continue to express an interest in socially responsible investing and we are pleased to be able to offer them investments which meet these criteria. We expect to see strong growth in this area in the future.”

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