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Sustainability

Risk, return and sustainability: the three dimensions of successful investment

Embracing change

Social and environmental change is happening faster than ever. Global warming, shifting demographics and the technology revolution are reshaping our planet. Against this backdrop we believe the gap between investment winners and losers is set to widen and conventional financial analysis is likely to fall short.

How long-term investing is changing

The scrutiny of asset owners has never been greater. As well as ensuring that they meet their liabilities, from paying pensioners to preserving capital, there is the increasing expectation that they have a positive impact on the wider world.  From improving corporate governance to limiting climate change, the pressure to create returns beyond the financial will grow. Our research shows stakeholders won’t compromise one for the other.

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Analysis beyond the numbers

A forward-looking, active investment approach is needed to navigate these forces. This means understanding how a company interacts with society and its environment as well as analyzing its profit lines. It means having a team of investment professionals who can apply experience and knowledge to specific situations and help manage the risks. Today, many investors want returns, but they also want their investments to provide better outcomes for society as a whole.

A leader in sustainability

We are rated the No.1 pan-European manager for Responsible Investment by ShareAction, a non-governmental organization (NGO), and have an A+ rating from the Principles for Responsible Investment (PRI), a United Nations organization.

We look beneath the surface at the factors that make a difference to investment outcomes, rather than accepting conventional wisdom on the ‘right’ approach to sustainability.  We don’t tick boxes, but add value through real insight leading to better investment decisions.

Company analysis and engagement

We have built a proprietary tool called CONTEXT that provides a way to analyze a company’s relationship with its stakeholders and the sustainability of its business model. Data driven, it provides clear evidence on how companies are managing the most material issues and generates deeper insights for investors.   

We also realize that there is always room for improvement in the companies that we invest in.  We use our research to inform meaningful engagements - to shift perspectives and practices, and we monitor the outcomes of these conversations, enabling the delivery of more than financial returns.

Integrating sustainability

We don’t stop at equities but use our insights to inform decisions across asset classes and geographies. 

Sustainability is a fast-moving area of investment. We are working with clients to develop the right solution that targets their financial requirements whilst considering the expectations of other stakeholders.  We run bespoke strategies, from ethical to impact.  Realizing that we are on a journey, we share our insights and our research to help build a more sustainable future.

Featured products

Below is a selection of our products that are relevant to this strategic capability.

What are the risks?

Past performance is not a guide to future performance and may not be repeated.

The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested.  Exchange rate changes may cause the value of any overseas investments to rise or fall.

*2017 Share Action Responsible Investment Survey of European Asset Managers; A+ rating: Principles for Responsible Investment 2015, 2016 and 2017 assessment reports.

Important information

The views and opinions contained herein are those of the authors, and may not necessarily represent views expressed or reflected in other Schroders communications, strategies or funds. This webpage is intended to be for information purposes only. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The material is not intended to provide, and should not be relied on for, accounting, legal or tax advice, or investment recommendations. Information herein is believed to be reliable but Schroders does not warrant its completeness or accuracy. No responsibility can be accepted for errors of fact or opinion. Reliance should not be placed on the views and information in the webpage when taking individual investment and/or strategic decisions. Past performance is not a reliable indicator of future results, prices of shares and the income from them may fall as well as rise and investors may not get back the amount originally invested. All investments, domestic and foreign, involve risks including the risk of possible loss of principal. Investing in equities involves risk considerations, including market risk, prospects of stocks in the portfolio, changing interest rates, and real or perceived adverse competitive industry conditions. Investing in bonds may include interest rate, credit, inflation/deflation risk, mortgage and asset-backed securities, U.S. Government securities, and liquidity risks, to varying degrees. Investing overseas involves special risks including among others, risk related to political or economic instability, foreign currency (such as exchange, valuation, and fluctuation) risk, market entry or exit restrictions, illiquidity and taxation. These risks exist to a greater extent in emerging markets than in developed markets. The use of derivatives involves risks different from, or possibly greater than, the risks associated with investing directly in the underlying assets. Private assets are intended only for qualified and/or sophisticated investors and carry special risk considerations, including illiquidity risk, wide differences in valuations, the use of leverage, and higher credit risk than traditional assets. Asset allocation and diversification cannot ensure a profit or protect against loss of principal. No investment strategy, capability or technique can guarantee it will achieve its stated objective. UK Investors: The data contained in this webpage has been obtained from sources we consider to be reliable. No responsibility can be accepted for errors of fact and the data should be independently verified before further publication or use. The sectors shown are for illustrative purposes only and not to be considered a recommendation to buy or sell. Exchange rate changes may cause the value of any overseas investments to rise or fall. In North America, this content is issued by Schroder Investment Management North America Inc., an indirect wholly owned subsidiary of Schroders plc providing asset management products and services as a US SEC registered investment adviser and in the capacity of Portfolio Manager with the securities regulatory authorities in Canada. For all other users, this content is issued by Schroder Investment Management Limited, 1 London Wall Place, London EC2Y 5AU. Registered No. 1893220 England. Authorized and regulated by the Financial Conduct Authority.

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