08/03/10
By Andrew Holt
Socially responsible investing (SRI) can boost charity investment portfolios, rather than be to their detriment, according to investment managers at Newton Investment, revealed a London roundtable today.
Criticising the view that there is a trade-off between lower investment returns and SRI, Amanda Young SRI officer at Newton said the reverse was true - SRI could produce better returns in the long run.
Young said: "SRI and sustainability are long-term horizons, there are usually five-year time frames and beyond, so rather than seeing negative returns they can be seen as the other way around, with SRI offering better returns on long-term level."
Though Young did qualify her statement by highlighting: "Of course, it does depend on the approach and the investment manager, but the view that SRI offers an inferior return to general investments in not a valid one."
Moreover, Young added that SRI should be seen as separate from a more "negative" Ethical approach. "The consideration of environmental, social and governance (ESG) matters is not about negative screening, nor is it just about risk, but about organisations and what they want from a socially responsible framework."
Though Jason Pidcock, head of the Asian Pacific team at Newton, warned that government intervention posed a problem from an SRI perspective. "During an economic crisis there is a tendency for more government intervention, which can mean more time to deal with officialdom, which can be a challenge on time and resources."
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