Portfolio Adviser • Portfolio Adviser Magazine Responsible Investing • Not Little, Just Fierce

In A Midsummer Night’s Dream, Lysander famously observes that “the course of true love never did run smooth” – and the same might be said, rather less romantically for sure, for the course of structural growth trends. These days, for example, the march of technology may seem inexorable but the sector has had a reversal or two along the way – and a similar dynamic is arguably now at play with responsible investing.

A recent slide in share prices for businesses involved in the transition to greener energy sources has given the naysayers a chance to suggest sustainable investing’s latest spell in the spotlight will be short-lived. Yet in reality, just as technology has done before it, responsible investing continues to mature and grow, regardless of share prices – and, as we discuss overleaf, for a number of very solid reasons.

The memory of the technology sector’s great boom and bust either side of the new millennium is invoked in more detail in this guide’s final article – on innovation – on page 40. First, reviving an analogy that was much in evidence during the late ’90s, one commentator notes how, in the California Gold Rush in the mid-19th century, the real money was made not from starting a gold mine, but from standing by the roadside selling the mining equipment to the thousands of prospectors rushing into the valleys to try and make their fortune.

A little later, meanwhile, we recall another important lesson from 20 odd years ago – that exciting ideas are all very well but they will ultimately be of little use to portfolio managers and their investors if they do not, at some point, go on to make money. The underlying science may be fascinating but, when we are seeing businesses trying to develop power from coffee grains and make running shoes from castor beans, are some of the more ‘out there’ ideas going to profit their investors?

In between, we take a closer look at an exciting array of specialisms that find themselves at slightly different stages of development within the realm of responsible investing – from the clean economy (page 32) and financial inclusion (page 18) to the fights to protect biodiversity (page 29) and ward off climate change (page 22). In so many ways, the responsible investing sector has a great deal riding on it – not least, the hopes of avoiding another pronouncement from A Midsummer Night’s Dream: “Lord, what fools these mortals be.”