Case Study: Impact investing – the ethical choice

Bronwyn would like to invest in companies that help solve environmental or social problems.

After graduating in Environmental Science 10 years ago, Bronwyn started work in an education charity. Initially her role was to visit primary schools to teach children about how they can help the fight against global warming. Bronwyn has stayed working for the same charity and has reached the position of Educational Programmes Director. She misses working with children, but she remains a passionate environmentalist – she composts, recycles and feels guilty about the frequent city breaks she enjoys with her girlfriends.

When she started work 10 years ago she joined the charity’s group personal pension plan. She and her employer both pay 3% of her salary. Although Bronwyn doesn’t know much about finances, she has always understood the importance of saving for the future so kept up the pension payments, even whilst she was saving to buy her flat.

Surprised by the type of investments held

After 10 years she is pleased to find that her pension is worth nearly £50,000. Bronwyn knows her pension is invested in the stock market, but she’s never given this much thought. When she looks more closely at the funds her money is invested into, she is upset to realise she has been buying gambling and tobacco shares.

Her Group Personal Pension Plan does not offer any ethical funds, so she researches some alternatives. She likes the idea of investing in companies that help solve environmental or social problems, which she finds out is called impact investing. The problem is most companies offering this option have a very high minimum investments and high fees. Bronwyn doesn’t need complicated financial planning – she just wants her pension to be invested in a way she feels comfortable with.

Positive Impact Portfolios

She contacts Nicola at Simply EQ who tell her about the Positive Impact Portfolios. These portfolios are managed by investment professionals who select funds based on their positive contribution to the environment or society. With Nicola’s help, Bronwyn completes the online application process, which includes a risk profile to help her decide which of the 10 portfolios is most suitable for her.

Nicola also helps her check the details of her current pension plan to ensure that she won’t be worse off as a result of changing. Once they have agreed it is right for her to switch her pension, Nicola sends her a report confirming all the details and the application forms.

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