Team No Comments

What is ESG? – An Introduction – Part 3

This is the final instalment into our 3-part introduction to ESG.


In part 1, we explained what ESG is. In part 2, we went a little deeper and looked at the 10 ‘UN Global Compact Principles’ and the screening process for firms when selecting ESG compatible investments and companies.

Please check out the first 2 instalments if you haven’t already.

Part 1 –

Part 2 –

Here in part 3, the final instalment in our ‘What is ESG? – An Introduction’ blog series, we will look at what we at People and Business are doing as a firm to make sure that we are moving in the right direction by selecting firms with good ESG processes.

Due Diligence

We are required to write an annual Due Diligence report as a firm, to demonstrate our processes into making sure all the firms we use, whether it be a platform, product provider or investment solutions, are and remain suitable for our clients.

We measure this in a number of ways including service levels, performance and now, their ESG processes.

Whilst this is an annual requirement, we don’t view this as a once a year ‘tick box’ exercise. Our Due Diligence process is built into everything that we do. We continuously look at the companies we partner with, to ensure they provide the best possible service for our clients. The annual report is just a summary of our findings over the past year.

As our Due Diligence is something we build into our way of working on an ongoing basis and our ESG research is ongoing, this will be added as a permanent section of our annual Due Diligence report which we complete in the last quarter of each year. This month, we wrote an addendum to this report, fully focused on ESG.

Our ESG Focus

Last year, when the ESG investment focus really started getting some momentum, we made the decision to build this into our Due Diligence process and move towards an ESG investment approach where possible, and suitable for our clients.

We have asked our clients (both new clients and as part of our annual review process) for their thoughts on ‘ethical’ investing for years. Traditionally, ‘ethical’ investments haven’t produced the same level of returns as standard investments, but this has been changing. You no longer need to compromise on your investment returns to be a ‘good’ investor.

Just over 2 years ago, we became aware that Blackfinch Asset Management were due to launch a series of ESG approved Managed Portfolio funds. However, with any brand new investment, it’s not practical to go jumping in straight away. We need to see past performance over a real measurable period and how firm’s manage their investments and keep us, as the IFA, updated into the management of their Model Portfolio Services.

We were impressed with what we saw from Blackfinch and their ESG screening process. They use a combination of positive and negative screening, with much more of a focus on positive screening.

Over the past 2 years, we have been monitoring the progress of these portfolios and how they manage them. In September 2019, Steve actually went and visited Blackfinch’s Head Office, meeting key investment personnel and fund managers in Gloucester.

On the 2 year anniversary of the funds, we undertook analysis on the Blackfinch portfolios against their peers in the market which we currently use or have recommended in the past, and not only found they out performed, but had the strongest ESG processes.

Given our research, we have made the decision to introduce these Blackfinch Managed Portfolio Solutions into our investment proposition, where appropriate for our clients.

We are satisfied that they are ahead of the game on their ESG policies and feel that they will only continue to enhance these.

Currently, we are still under way with our ESG project and are looking into the ESG policies of all the investment firms/ solutions we have under our proposition and will continue this throughout the rest of this year, and then monitor this on an ongoing basis.

We are now building ESG into our client review process, highlighting ESG to our clients and getting their views.

Although ESG is still a relatively new concept within the industry, we have been looking at this for a while behind the scenes and will continue to embed this focus through everything we do at People and Business. As the market becomes more ‘ESG aware’ we expect there to be much more of a focus on ESG in this industry and we will monitor this to ensure that we keep up to speed.


Hopefully this blog series has given you a brief understanding of what ESG is, how this is measured and what we are doing as a firm to ensure we are moving towards more sustainable and socially responsibly investments.

This may be the final instalment into this ‘What is ESG? – An Introduction’ blog series, but this won’t be the last you will hear from us on the subject of ESG (far from it!).

As this blog notes, this is becoming a big theme in this industry, and we want to make sure we are and continue to be ahead of the curve, by selecting investments and firms that, we believe are ‘doing the right thing’.

The current Covid-19 Pandemic has further raised the profile of ESG as people contemplate potentially the next major crisis, global warming.

Along with our regular industry updates, we will continue to source good ESG content to keep you updated, and later this year, we will post an update into how we are getting along with our ESG processes.

As a business, we will also consider how we can move in the right direction too. We are about to invest in new lights in the office that use far less power.

Andrew Lloyd