Crystal Wealth Newsroom

Moulding the future with responsible investments


Every business has an impact on people and the planet in which we live; and therefore so do all investments – and investors are becoming increasingly aware of the impact businesses have.

“Responsible and ethical investments seek to minimise the negative effects generated by business and promote positive impacts,” says Lisa de Franck, Crystal Wealth Partners Investment and Advice Manager.

“Responsible and ethical investments ultimately deliver a healthier economy, society and environment – and, of course, a robust investment outcome.”

For awhile, an approach to responsible and ethical investment was to simply avoid companies that didn’t meet your expectations. For example, if the organisation was in an industry that didn’t align with your moral compass, engaged in conduct that was environmentally and socially irresponsible, or displayed poor corporate behaviour, they’d find themselves out of many people’s investment portfolios.

Increasingly, a more proactive approach is needed.

“At Crystal Wealth Partners we believe it should be a combination of negative screening, sustainability-themed investing, ESG integration and, where suitable, impact investing as we believe they all play a part in responsible portfolio construction,” says Lisa.

The impact investors can collectively have is significant. For example, there has been increasing investor preference to avoid investments in companies that use or extract thermal coal. Investors want to help mitigate the impact of climate change as economies transition to low-carbon consumption. In 2020, BHP announced that it would divest its thermal coal assets following investor pressure.

BHP isn’t the only company following this trend and we are noticing the percentage weight of thermal coal assets within managed funds has reduced.  Fund managers are less and less willing to have exposure to companies that derive a meaningful income from thermal coal use or extraction.

Throughout 2020 when the world shut down due to the Covid-19 we saw the demand for oil fall dramatically, which accelerated the energy transition theme.  Oil markets were already under long-term structural pressure from climate policy and the increasing competitiveness of renewables, but Covid has exacerbated these long-term pressures causing the biggest drop in oil demand ever seen.   2020 could perhaps be viewed as a trailer of what is to come over the next five years.

If you’d like to find out more about how you can start a responsible investment portfolio, get in touch with one of our advisors on the ‘contact us’ page.

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