Jan Oliff, managing director of Jan Oliff Financial Planning and member of the Ethical Investment Association, has been involved in ESG investing since 2006 – it’s a passion she says that keeps her working.
Here, Oliff discusses her problem with employee pension funds, why regulators encourage greenwashing and where she sees sustainable investments heading next.
You’ve been in ESG investing since 2006, why did you choose this route?
My mother died of lung cancer at age 66, I was already a financial adviser and determined never to support tobacco companies. The only fund I found excluding tobacco was the Stewardship fund of Friends Provident. Both [botanist] David Bellamy and [actress] Jo Lumley were on the Stewardship advisory panel. David a renowned environmentalist and I think everyone knows Jo as a vegetarian.
What has changed over that time in what clients want, and what is available in terms of investments?
When the financial crash happened in 2008/09 I approached the local BBC radio in Bristol to question why pension investors were not making better choices. The general response was that it was not possible to question the pension fund managers. The public had no say in what the banks did with their money. That has changed, of course, but not entirely.
These days I am more likely to find that pension funds are thought of as the employer’s choice. Despite the fact that employers are not allowed to provide advice and generally invite a pension provider to arrange things.
Employees, grateful that they have a pension, are badly served by the providers, who give minimum attention to advising, other than to occasionally encourage increased contributions. The exceptions are the clients who actively seek advice on good outcomes for them, their families and the planet.
What’s your view on the extent to which the demand for ESG investing has increased greenwashing in funds?
The demands of the regulator and the public of course encourage greenwashing. It is unthinkable that a provider won’t attempt to compete by emphasising the positive and ignoring the negative. The rules surrounding ESG are confusing, and it takes determination to discover the truth.
Which new ESG investment areas are you most excited about?
My excitement is based on the conversations we are having with clients. The things that matter to the individuals and turning their values, alongside their financial objectives, into positive actions. I love the fact that clients are interested, not just accepting advice but joining in the process. It makes a much more interesting and sustainable relationship.
Is a lack of reliable ESG data a problem?
No, in many ways there is too much data, it’s the quality that needs improving. Providers and fund managers are not always committed to ESG, but they avoid saying so. Sometimes they even provide advisers with handy excuses.
Where do you see ESG investing heading next?
I would like to think that the sector will grow, clients will demand more and, in particular, the tax incentives for research and development in medicines and medical devices, alternative energy, carbon caption and engineering solutions continue for those prepared to take some risks.
Example ESG portfolio: