Your Responsible Investment Roadmap

8 steps that will start you on the road to being a responsible investor

Becoming a responsible investor can seem like a daunting task, but don’t be put off – Moxie Future is here to help you.

Where you put your money matters. It should reflect your beliefs, and it should be integral to your personal philosophy.

Investing can help you reach personal goals. And responsible investing can help you align your investing decisions with your values and beliefs.

With this in mind, we’ve constructed a simple 8-point action plan to start you off on your journey…

BRAIN WORK BETTER WITH A PIECE OF PAPER? USE OUR HANDY WORKSHEET!

STEP 1

PRIORITIZE WHAT YOU CARE ABOUT

One of the best ways to start is by identifying your priorities – the issues you really care about.

Ask yourself: What sort of world do I want to live in? Where do I want to see change happen?

Do some soul searching.  Appreciate that you won’t be able to fix everything at once, but don’t be afraid to think big.

Write a list of your top 10 priorities

Whether it’s combating air pollution or eradicating forced labor (or perhaps both!) – once you have this, you will be able to take the next step.

What really matters to you?

  • Buying clothes knowing that the workers have been treated well and paid fairly?
  • Knowing that a company works closely with local communities, perhaps through helping them to secure their water supply?
  • Purchasing a car that does not contribute to air pollution?
  • Seeking out companies that actively look to reduce their carbon footprint?

STEP 2

TRANSLATE YOUR PRIORITIES INTO RESPONSIBLE INVESTMENT BELIEFS

Having a better understanding of your priorities can help you to then plot your responsible investment beliefs.

These are the guiding principles that spell out who you are and what you want to achieve with your investments.  Put it another way, your responsible investment beliefs are essentially your philosophy.

If this sounds too abstract, some people like to think about it in terms of what role a business plays in society.  Our responsible investment beliefs help determine the kind of businesses that we want to support.  And guide us towards companies that understand their role in society.

Don't confuse this with ...

… your investment goals and strategy.

That comes later in Step 7!

What could this include?

  • Your mission
  • Your vision
  • Your values and guiding principles
  • Your view on the role businesses should play in society
  • Companies, sectors or products that you do not agree with

STEP 3

SET YOUR BOUNDARIES AND ASSESS YOUR APPETITE

Once you have articulated your beliefs, you also need to set your personal boundaries.

What does this mean?  Establish how much you are willing to do in terms of changes to your financial decision-making and investment choices.

It is important to be comfortable with how active a responsible investor you want to be.  There is no right or wrong here.  This reflects your motivation and appetite for personal change.

Some people also like to think about this in terms of their ‘risk appetite’ – how much risk do you want to take in each decision?

Set your risk appetite, determine your risk tolerance

Assess the level of risk you are willing to take – this requires an understanding of your ability and willingness to stomach swings in returns.

Some things to ask yourself

  • How important is it to me to become a responsible investor?
  • How much time do I want to put into this?
  • To what extent is the impact of my investment important to me?
  • How much do I want seek external advice or input?
  • To what extent is it important that I invest locally versus internationally?
  • Do I have a low, moderate or high risk appetite?
  • How does this differ from but also compliment my charitable giving?

STEP 4

GET MORE EDUCATED, GET MORE EMPOWERED

It’s worth saying loud and clear … get educated and get empowered. There is a wealth of information and analysis out there, so use it to your advantage.

Worried you don’t have the time? Aim to set aside one hour a week to research.

And it’s important to bear in mind that you don’t need to rush in.  Take time to learn more about the issues that you really care about so that you can make more informed decisions.

Identify and list leading sustainable companies that appeal to you

There are a lot of good resources out there to help you – check out some of the listings such as:

Global 100
Dow Jones ESG Indices
FTSE4Good Index Series
Hang Seng Sustainability Index

Some ways to do this

  • Sign up to newsletters and info from the organizations that work on the issues and priorities that you identified in Step 1.
  • Connect with your local responsible investment bodies via the Global Sustainable Investment Alliance and check out what is happening on the international scene at the UN Principles for Responsible Investment. These organizations may be working with the ‘big boys’ but their research and content is cutting-edge.
  • Get active in online forums so you can learn about what others are thinking and doing!
  • Listen to the experts through attending events and lectures, watching TedX talks and YouTube videos – start with our curated videos.
  • Avoid some of the old-school financial advice and investment blogs – this is probably not where you are going to get the kind of information you are looking for.

STEP 5

AUDIT YOURSELF

Before taking action you need to audit yourself …

The BIG questions …. Do you actually know how and where you are currently invested?  Do you have a sense for whether or not these investments are in line with what you actually want for the future?

The reality is that many of us sign up to a retirement pension or a savings plan, and tick the ‘ethical fund’ or ‘green investment plan’ option. We feel momentarily better but often have absolutely no idea where these funds are actually going.

If your money is invested in listed companies (either directly or through a fund), take a look at their corporate sustainability report which should be available on their website.

Sometimes these reports have different names or can be included in the company’s annual report, but if you can’t find it then contact the company directly.

List your current investments

Go through the paperwork and make sure you really understand what you are currently investing in. Take a look at each investment (whether this is a pension plan, a savings product or other investment fund).

Some things to look for

  • Read through the reports to understand the company’s philosophy and whether the strategy makes sense to you.
  • Does the company think about some of the priorities that you have identified in Step 2?
  • What kind of data does the company provide in these reports and does it reflect the commitments it makes?
  • Do your due diligence – there are amazing organizations that make it their job to keep an eye on the practices of companies including:

STEP 6

ENGAGE WITH YOUR FINANCIAL SERVICES PROVIDERS

You may or may not have a financial advisor.  If you do, it’s worth sounding her or him out, get a sense about what they think.  If you don’t have an advisor, perhaps approach one anyway.

Remember, – the more you know, the more informed the investment decision you make will be.

One other thought – you may want to take these questions to your bank and speak with their wealth management advisor as well.  This is usually free advice from someone well qualified – but don’t feel pushed into action or decisions by this person chasing you!

Sometimes we may need to be persistent – sometimes we may come across resistance or be told that these issues don’t matter.  That’s when we need to keep up the pressure.

And if you find a good adviser – recommend to a friend.

Make an appointment with a financial advisor or bank wealth manager

Go prepared with your list of questions.

Some questions to ask

  • How does sustainability and responsible investment fit within your investment philosophy? Can you demonstrate this? If so, how?

Why ask this? It will help you assess their level of understanding of the key issues.

  • In your view, what are the biggest non-financial risks to my investments in the next 2, 5 and 10 years? And do you see these risks as potential opportunities?

Why ask this? It will indicate the extent to which she or he factors these in when providing advice to you.

  • What skills, knowledge and tools do you or your firm provide to support my responsible investment decisions?

Why ask this? It will help you assess their level of understanding of the issues and the support you can expect.

  • What kind of products do you know of that would reflect my responsible investment beliefs?

Why ask this? It will help you determine whether she or he can provide access to the kind of investment products you are looking for.

  • Are other clients asking these kinds of questions?

Why ask this? It will provide an indication of how familiar she or he is with the issues.

STEP 7

STRATEGIZE YOUR PLAN OF ATTACK

So now you have done a lot of the groundwork.  It’s time to get thinking tactically – it’s time to define your responsible investment strategy. This is your ‘plan of attack’ – and will guide your decisions based on your goals.  It will essentially help you select your investments.

Don’t panic – this doesn’t have to be long and complex, nor set in stone.

Conventional wisdom assumes that men and women approach money differently. And older research certainly focused on whether women were more risk-averse than men when it comes to their money. The good news is that more of the research today is exploring the nuanced differences between how and why women and men may make investment decisions differently.

Being a responsible investor is about making well-informed, well-considered decisions.  Not just taking longer to make decisions, but making decisions for the longer-term.

Research also indicates that women are more likely to confer with their peers when making decisions.  So discuss your plan with your friends and family.  Get their feedback.

Write down your goals and immediate actions

Use your well-thought out strategy to build your confidence as a responsible investor.

How on earth do you do this?

  • Look back at your responsible investment beliefs (Step 2).
  • Reflect on what you have learned from others and your existing investments (Steps 4, 5, 6).
  • Identify and write down your goals – for example:
    • Not to invest in companies in the fossil fuel sector.
    • Seek out companies with sustainable sourcing strategies.
    • Invest in clean energy companies.
  • And then write a list of immediate actions you can take – for example:
    • Change the allocation in my current pension plan to a different fund.
    • Speak with my pension plan provider about alternative fund options or new funds that may be coming available in the future.
    • Follow up with my financial advisor on new investment products.

NOTE OF ADVICE: Setting of goals and strategy should also be completed in alignment with your broader goals (how much money you need when and so on). Speak directly with an investment professional to ensure that you have done this.

STEP 8

URGE FRIENDS AND FAMILY TO TAKE ACTION

When discussing with friends and family (Step 7), engage them too.

How to do this?

  • Share interesting articles and participate in online forums.
  • Talk openly about your responsible investment beliefs – many women have not thought about this approach as an option so sharing your personal experience can be a powerful opener.
  • Use your social media to share examples of what you are invested in.

PUT PRESSURE ON FINANCIAL INDUSTRY TO TAKE ACTION

We also need to engage with the financial services industry, through conversations with our banks and financial advisors.  We want them to change too.

We need to counter any industry bias that does not fully listen to the needs of women.  We need to demonstrate that there is demand for responsible investment products.

Speak directly with your bank or financial advisor to let them know what you are wanting.  Contact your pension plan provider and ask questions.

STAY ACTIVE YOURSELF

Becoming a responsible investor isn’t a one-off event.  It’s an active choice which probably needs some regular circling back.  So keep actively engaged and keep going back over these steps, setting a regular time to do this over the course of the year.

It is likely that your investment beliefs may shift as the world around us changes.  Set aside time to regularly review your priorities, and also check in with those around you.

You may also want to think about how you want to measure yourself – perhaps even set your own personal KPIs!

Your Feedback

We’d love to hear what you think about our Roadmap!

Privacy Preferences

When you visit our website, it may store information through your browser from specific services, usually in the form of cookies. Here you can change your Privacy preferences. It is worth noting that blocking some types of cookies may impact your experience on our website and the services we are able to offer.

For performance and security reasons we use Cloudflare
required

Google Analytics tracking code disabled/enabled

video embeds (e.g. YouTube) disabled/enabled

View our Website Privacy Policy

Our website uses cookies, mainly from 3rd party services. Define your Privacy Preferences and agree to our use of cookies.