The Covid-19 pandemic has triggered an economic shock unlike any we have seen in our lifetimes. It has shown that as a global community, we can make drastic changes to our way of life.
Clients, financial advisers, and asset managers need to adopt this mindset to address climate change. The best time to start was 20 years ago. The second-best time is now.
We need to build a green recovery to ensure we tackle the existential threats our society faces.
Many of us accept that change is necessary. As an industry lets understand how quickly new rules and regulations can be enacted.
The threat of greenwashing continues to be an issue within our industry, fuelled by the increased pressure from clients and regulators to invest with firms who follow these criteria.
With this comes the need to identify fund managers who truly integrate ESG criteria, in both how they engage and invest in companies.
This can be a challenge for financial advisers, particularly IFAs who are carrying out their own research and due diligence.
It is already best practice to capture ESG considerations as part of suitability conversations with clients. So many advisers will have to stay on top of their processes and look to strengthen these, keep up to date on developments and find solutions that fit their clients' needs.
Given the scale and pace of change we are seeing in this space already, advisers will need to be equipped to navigate the complexity and confusion. And this is where the whole can be greater than the sum of its parts.
Clients and financial advisers can have real influence to accelerate the focus on ESG investment, which in turn enables and drives change and adoption of more sustainable practices. This will be key to drive real, tangible change in our industry.
We recognise our clients' money can be a real force for good, and our goal is to help deliver financial wellbeing in a world worth living in.
At St. James's Place, we have committed that all our fund managers we work with are signatories to the UN's Principles for Responsible Investment. Twice as many of our fund managers are rated A+ than the industry average.
Our advisers can be confident that we are carrying out the necessary due diligence on their behalf.
We also recognise the influence our size and scale can have and how that can be a force multiplier. We invest money on behalf of our 760,000 clients with assets of about £118bn.
We invest with 39 fund managers across the world who collectively invest over £8trn in assets. And we estimate that they in turn invest over £60trn in companies, bonds and properties around the world.
Which is why investing in a sustainable and responsible way can be 27x more impactful in reducing your personal carbon footprint than taking action such as flying less or eating less red meat.
John F. Kennedy once famously said: "If not us, who? If not now, when?" The time to act is now. And the good news is you can secure the prosperity of your financial future, your families and the planet.
Rob Gardner is director of investment management at St. James Place Wealth Management