Schroders Virtual Sustainability Masterclass: Why investors should expect to deliver more than financial returns?

The question of how we, as investors, can assess the impact that investments can have on society and thereby deliver risk-adjusted returns for our clients was a key focus of Schroders virtual Masterclass event: Sustainability: Expect more than financial returns.

At the virtual event, attended by 40  journalists from around the world, we asked the audience if companies should be required to report on risks related to sustainability and governance concerns more fully and regularly. A resounding 97% of respondents answered ‘Yes.’

Schroders’ Katherine Davidson, Portfolio Manager, Global Sustainable Growth Fund, and Kate Rogers, Head of Sustainability, Schroders Wealth Management, examined the role that asset managers should play in holding companies to account; from estimating and reporting on impact, to how we engage with companies to help deliver risk-adjusted profits to our clients.

Speaking at the event, Kate Rogers, Head of Sustainability, Schroders Wealth Management, said:

“People are increasingly seeking to match their values with the way their money is invested. We give our clients the opportunity for their investments to have a positive impact alongside financial returns, and measure and report the impact that their investments have on people and the planet.

“We believe that investors should no longer look at their investments through a two dimensional lens of risk and return. This future of investment management considers a third dimension, impact. This evolution is already underway, and what is already clear is that sustainability and impact investing are here to stay.”

Schroders recently unveiled its MyStory series, showcasing the impact that investments can have on society and how assessing this impact can help deliver-risk adjusted returns for clients.

Katherine Davidson, Portfolio Manager, Global & International Equities commented:

“If we look at sustainability in the context of the global pandemic, it has become increasingly obvious that businesses cannot and do not operate in a vacuum. As stewards of our clients’ capital, we expect companies to be transparent and to take responsibility for the impact that their business has on the planet and wider society. The public is increasingly looking to companies to take a lead on societal issues. We see this as the start of a new social contract between business and society.

“We recognise that as a global active manager we also have a big role to play in encouraging and incentivising this behaviour. Ultimately, our goal is ensure strong - and sustainable - returns for our clients over the long term. Reaching this goal requires understanding and managing the impact of our investments, and ongoing engagement with companies to help them understand the business case for sustainability.”

A recording of the full event can be viewed here.