Dusting off the Sustainable Investing Playbook
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Written by: In recent years, sustainable and ESG (environmental, social, governance) investing has moved from niche to mainstream and almost back to niche again. But while headlines about greenwashing and short-term underperformance led to some investor hesitancy post 2022, there is growing evidence that sustainable investing is once again front of mind for UK clients. In a year marked by natural disasters, geopolitical unrest, and societal tensions, it is easy to see why investors are increasingly aware of ESG issues, as more than a peripheral consideration. These factors directly impact our daily lives and addressing them is central to the future of global civilisation. As investment managers, we are constantly thinking about investment themes and client priorities. One clear trend that we have observed is that more clients would like their investments to have a positive, measurable impact. In the last 12 months, the tone around sustainable investing has shifted. Clients are no longer approaching the subject solely from a place of values or climate concern, but with a renewed pragmatism that balances sustainability with financial outcomes. Increasingly, clients recognise that environmental and social factors are material to long-term performance and are open to aligning their sustainability preferences with their return expectations. While a minority remain driven by strong ethical convictions, the majority want portfolios that reflect sensible sustainability standards without compromising growth. This more measured approach creates space for advisers to position sustainable investing as a practical tool for risk management and steady wealth accumulation. In summary, advisers can reframe sustainable investing. Sustainable investing can be seen as a way of future-proofing capital, without sacrificing returns. By integrating sustainable criteria alongside traditional analysis, advisers can help clients create resilient portfolios that perform as expected. In the second half of this note, we outline three main insights gained from discussions with advisers: Insight 1: Clarifying Client Expectations When clients talk about ‘sustainable investing’, they often mean different things. Some see it as risk management, others as a means of creating impact, while many simply want portfolios aligned with their values. Understanding these motivations upfront enables advisers to recommend solutions that genuinely fit client needs. Insight 2: Building Knowledge Advisers are increasingly reading and researching sustainable investing regulation, investments and themes. As the saying goes ‘knowledge is power’, and advisers can lean on independent resources to cut through the noise and feel well informed and confident in conversations with clients. Insight 3: Reframing the Narrative Advisers are reminding clients that sustainable investing is not a ‘style tilt’ that translates to lower returns overall. Having a focus on sustainability is a way of building a portfolio that may be more resilient in the face of systemic change. This framing can help avoid polarised debates about values and instead keep the focus on financial planning outcomes. To conclude, sustainable investing has matured. For advisers, the opportunity lies in presenting it not as a feel-good option, but as a practical, forward-looking strategy to protect and grow capital. With clear frameworks, robust research, and diligent investment partners, advisers can guide clients in ensuring sustainable investing supports both financial and societal goals. If you would like more information on Aspen’s Sustainable Range, please contact Lewis Brasseaux at lewis.brasseaux@aspenadvisers.com or visit our website https://aspenadvisers.com/contact/. |