It is becoming a common standard that investors in wealth and asset management have made a turn in the selection approach of an agent or of an institution to represent them. In the past each one of them would stick just to the figures, but now? I would call it a natural progression of the financial services if we all consider the fallacies and misplacements of the past years. And to cut the long story short and clarify what I am trying to say, nowadays the qualitative elements of the investment manager, or the private banker are those that really make a difference, or at least are equally important to the returns promised.
In discussions with friends and other professionals, I have realized how much the character standard is valued and appreciated against the returns. Cause one way or another returns are always returns and they play an important role in ones selection, but at the end of the day the moral compass that is related to trust concludes a deal. Now more than ever – signs of the trend that was nurtured within the financial crisis period – investors rely on how good they can communication and interact with people that have the responsibility and power to manage their funds.
On another dimension, the “ethicality” of assets has now become an emerging sector. The ethical rating of companies (assets) that similar to the ones that describe the risk (credit rating) of a company is now taken into consideration when making a selection. Those ethical rating agencies, see ECPI ratings on Bloomberg’s Terminal (http://www.ecpigroup.com/ecpi/), or visit EthiSphere, the agency that Forbes uses to determine World’s Most Ethical Companies, (http://worldsmostethicalcompanies.ethisphere.com/scoring-methodology/) and ClimateCounts for the financial sector (http://www.climatecounts.org/scorecard_sectors.php?id=27) now provide with evidence and facts the ethical and social responsibility output (impact) of companies that are target of placement, financing and other financial transactions.
Graph 1: selection criteria for ECPI rating
So what is ethics and ethical investing? According to Investopedia.com Ethical Investing is using one’s ethical principles as the main filter for securities selection. Ethical investing depends on an investor’s views; some may choose to eliminate certain industries entirely (such as gambling, alcohol, or firearms, also known as sin stocks) or to over-allocate to industries that meet the individual’s ethical guidelines.
Ethical investing is sometimes used interchangeably with socially conscious investing, but socially conscious funds typically have one overarching set of guidelines that is used to select the portfolio, whereas ethical investing brings about a more personalized result (for the full description visit http://www.investopedia.com/terms/e/ethical-investing.asp).
Towards that end, Interfima has chosen to support and contribute to the 2nd Global Ethical Finance Forum (http://geff2017.com). The event, held under the patronage of the Scottish Government, supported by the UK Government and hosted by the Royal Bank of Scotland, The Global Ethical Finance Forum (GEFF) is an initiative of Middle East Global Advisors in strategic partnership with the Islamic Finance Council UK (UKIFC) – two leading institutions spearheading the agenda of sustainable and inclusive economy and of forging connections with the broader ethical finance industry, encompassing Socially Responsible Investing (SRI), Environmental, Social and Governance (ESG), and Islamic/faith-based Finance.
All Interfima Members are subject to a 15% discount to the registration price by using the code INTFIM15 at https://t.co/gAt9j8X0tI