Responsible Investment - supporting the transition to a more sustainable economy

“Sustainability” is normally defined (Brundtland Report “Our Common Future”) as ensuring that the needs of the present generation can be met without compromising the ability of future generations to meet their own needs.

It’s now widely accepted that the destructive and unsustainable usage of natural resources will have a negative impact on future generations unless we take action. By changing course and considering human impacts more carefully the hope is that we can preserve the earth’s natural resources of clean water, unpolluted air, healthy farmland and other vital natural systems.

The Transformation

It is now widely accepted that the global economy is utilising natural resources at a rate which puts at risk the living standards of future generations.

In addition, negative “externalities” or impacts arising from industry such as pollution or environmental degradation, can no longer be ignored.

The move to a more sustainable or responsible economy is already underway, with huge investments being made into areas such as renewable energy (wind, solar, hydro and geothermal). Other core themes include the transition to low-carbon energy, sustainable transport, water management, resource efficiency, environmental services, healthcare, safety and education.

Joseph Schumpeter’s concept of ‘creative destruction’ is playing a vital role in a rapidly changing world. To put simply, the creative powers of dynamic capitalism lead to the destruction of old ways of doing things, making space for new structures – such as industries, firms and jobs.

Taking climate change, for example – we’re seeing innovative solutions that are revolutionising the energy sector and challenging the out-dated traditional models. In 2023, the International Energy Agency (IEA) estimates that $2.8 trillion will be invested in energy with $1.7 trillion expected to flow into clean energy – including renewables, nuclear power, grid upgrades, energy storage, and low-emission fuels. Clean energy investments have surged due to several factors: better economics and enhanced policy support through instruments like the US Inflation Reduction Act and new initiatives in Europe, Japan, and elsewhere.

The central premise here is that investing is a long-term decision, so we need to position ourselves to support future industries. In a world shaped by Schumpeter’s concept, it’s not just about making investments, it’s about strategically placing our bets on the industries and technologies that will define the future.

Read more about this at Investopedia

Investing for Impact

Investing your money to make a positive impact isn’t a far-fetched and radical idea anymore, it’s quite practical.

At Harmonic Financial Planning, we assist clients with investment strategies that support areas within the economy which have a positive impact on people and the planet.

Interest in these types of investments has been rising as more people recognise the need to change our approach for a fairer, sustainable, inclusive world. But knowing how or where to invest your money for positive change is hard. That’s why we keep the conversation going with our clients, discussing not only the ethical side but also how to manage the risks effectively. It’s about making your money work for you and the world you believe in.

What Defines Responsible Investment?

Financial returns: Impact and responsible investing is financially rewarding, distinguishing it from philanthropy.

Social and Environmental Impact: Generates social and environmental progress alongside financial gains

Focus on Products and Services: The primary investment focus is on a company’s or fund’s offerings, not just its internal operations

Integrated Measurement: Social and environmental impact is measured alongside financial performance.

Innovation Emphasis: Innovation often plays a significant role in underlying investments

Long-Term Perspective: This approach emphasises a long-term investment horizon.

Understanding the Impact Lexicon

If you’re familiar with this field, you’d likely have encountered a variety of investment choices, each with its own sets of claims. These range from ethical investment, sometimes referred to as “normative” investing, sustainable investing, ESG investing, and impact funds. With so many to choose from, it’s important to understand what each entails and minimise the risk of ‘impact or green-washing.’

Talk to Us

We Know Our Stuff

As a client-oriented firm we know you want impact, return and transparency.

Our founders and board members bring together decades of experience in the UK responsible investment industry. They have played pivotal roles in establishing some of the earliest and most pioneering organisations in ethical and sustainable investing.

Meet our key team members:

  • John Ditchfield - Previously Managing Partner of the UK’s ‘original’ responsible investment firm, Barchester Green Investment.
  • Pradeep Jethi - Previously Co-Founder and Chair of the Social Stock Exchange launched at the G8 Social Investment Summit.
  • Clare Brook - Advisor to Harmonic Financial Planning, and previously Founding Partner of WHEB Asset Management and Vice Chair of UK Sustainable Investment and Finance Association (UKSIF)
  • Will Oulton - Previously Chair of the European Sustainable Investment Forum (Eurosif) and formerly the Responsible Investment Advisor at First Sentier Investors.

The Main Key Themes

For investors of this kind, it could be suitable to blend various funds with direct investments to achieve the maximum ‘impact.’ This involves investing in portfolios or funds engaged in sectors like:

  • Environmental Sustainability
    • Water management
    • Environmental services
    • Sustainable transport
    • Resource efficiency
    • Cleaner energy
  • Social Well-being
    • Health
    • Education
    • Safety

Our Approach

We’ve designed our solution to align with your values and beliefs, all while working towards your long-term financial goals.

We take a two-step approach to this. First, we use a straightforward questionnaire to gain insights into your concerns. Then, we engage in a more in-depth conversation about your values and beliefs to explore how we can align them with the investments we choose.

Thanks to our independent status, we have the flexibility to pick from a wide range of funds and products across the entire UK investment market. This empowers us to pinpoint a tailored solution that suits your needs perfectly.

At your annual review, we:

  • Update your circumstances
  • Discuss the financial performance of your assets
  • Discuss any relevant tax changes with you
  • Make recommendations concerning your service

Frequently Asked

Frequently Asked


How does responsible investment differ from traditional investment approaches?

The primary difference between traditional investing and responsible investing is that your goals will be different for each strategy.

Traditional investing uses profitability as the primary factor in selecting the investments you will own.

Complementing the traditional financial analysis and portfolio construction technique is responsible investing. When someone wants to implement the strategy of responsible investing, they will apply their beliefs and values in the selection process, avoid areas they disapprove of and select industries they think match their values. For example, an investor might be driven by the pressing issue of rising diabetes rates in the United States and may opt to acquire investment bonds directed towards funding initiatives in patient education and support programs.

In essence, the aim of responsible investing is to put beneficiaries’ money to good use rather than invest it in any activity that could be construed as doing harm.


What types of responsible investment options are available?

Compared to the traditional investment market, responsible and impact investment options are limited, with many products available only to institutions and private equity players. However, despite the challenges some excellent impact funds do exist.

For example, WHEB’s sustainability fund is based on nine environmental and social themes that aim to support the transition to a healthy, low carbon and sustainable economy. The fund exclusively invests in companies providing solutions to sustainability challenges, businesses whose products and services have a positive impact on the world. WHEB’s investment strategy is available in a range of funds designed to meet different investors’ needs.


What criteria or metrics are used to assess the performance of impact investments

The specific criteria and metrics used can vary widely depending on the nature of the impact investment, its goals, and the industry in which it operates. Effective impact measurement often involves a combination of quantitative and qualitative assessments to provide a comprehensive view of an investment’s performance.

For example, WHEB’s ‘impact calculator’ stands out as an interesting innovation. It empowers investors to gain a clearer understanding of the tangible positive effects their investments are generating in the real world. This is achieved by combining the individual positive contributions made by portfolio companies and translating them into a quantifiable impact per pound of investment.


Are there potential risks associated?

Like traditional investments, responsible investments can face various financial risks, such as market volatility, liquidity, and currency risk.


How do you ensure ongoing alignment with my values?

By conducting annual reviews and routine meetings, we will ensure that, in addition to our conventional financial analysis, your investments will consistently align with your objectives.

Services We Offer

Contact Us

We'd welcome an initial discussion, and a first appointment can be booked using the links below.

If you require advice based on specific circumstances, contact our professional advisors.

[email protected]   |   +44 2038598921

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