One of the big discussions in politics is about our long-term energy policy and how our economic, social and environmental future should align with our values as a country. We hear a lot about net neutrality and transitioning to a carbon-neutral economy. I believe we’ll see more on the policy front as we head into the next federal election in 2022.
While I believe Australia needs the political will to back a carbon-neutral transition, my focus here isn’t politics but how ordinary investors can look beyond the rhetoric and incorporate these concepts into investment themes.
Nine out of 10 investors want their investments to align with their values, according to a survey published by Swiss investment bank UBS. I like to refer to this as a movement towards purpose-driven investing.
UBS conducted the survey in May this year among 3800 investors aged 25 or older with at least $1 million in investable assets split across 15 global markets. Researchers compared the findings with those from a study conducted in May 2020 with a similar sample.
Seventy-nine per cent of respondents in the new survey said the pandemic had prompted them to reassess what was important. Half planned to increase their charitable giving. Nearly 60% reported they were more interested in sustainable investing than they were before the outbreak.
Reason behind decisions
There are many loose terms such as ethical, sustainable and socially responsible investing and for some the definitions are still being formed. But what’s clear is that many investors are now starting to consider the “why” behind their business, career and investment decisions.
Recently I learned that two amazing businesses — Rolex and Bose — are somewhat social enterprises in that their ownership and profits are paid back into the community. Rolex is owned by the Hans Wilsdorf Foundation.
In 2015, the foundation saved the Servette FC, Geneva’s football club, from bankruptcy. It financed and managed the design and execution of a spectacular bridge on Geneva’s Arve river, and had it named the Hans Wilsdorf bridge.
In 2017, it offered 90% of the funds needed for Geneva’s applied arts school, HEAD, to acquire a large, new in-town campus. One of the latest actions was to buy a famous downtown Geneva building that was scheduled to be torn down. It harboured a cinema theatre that had been deemed unsalvageable.
The majority owner of Bose Corporation (known for making high-end audio products) is the Massachusetts Institute of Technology (MIT). MIT receives cash dividends through the non-voting shares donated by Amar Bose, the corporation’s founder, in 2011.
According to the company’s annual report, in the 2019 financial year Bose Corporation received revenue of $US4 billion ($5.4 billion) and employed more than 9000 people.
Profits from both Rolex and Bose are used to help society overall, as opposed to making CEOs and institutional investors richer.
My personal business, career and investment goals are driven by my desire to support and provide for my young family. Taking this further, it’s not even the returns or the money that matter. It’s the confidence that my family can have knowing that hard work, strategic thinking and resilience are all important in building confidence and living a happy life. That’s the ultimate goal.
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