Your Guide to Sustainable Investing

Sometimes, it feels like the world keeps getting more complicated. It can be hard to know who to trust with your money, but our members still want to invest in a way that reflects their values and positively impacts the world around them.

That’s why Sheffield Mutual proudly presents our Sustainable Investment ISA, specially designed to help our members make great financial decisions while helping grow and support the causes closest to their hearts. 

What is a Sustainable Investment?

Sustainable investments are a clever way of investing your money while positively contributing to the world around you.

At Sheffield Mutual, our team of investment professionals have worked hard to identify funds that have enabled us to generate positive returns so far while supporting businesses that drive positive change.

Throughout this article, we will be answering some common questions about sustainable investments, including:

• Why Choose a Sustainable Investment?

• What Sustainable Investments Does Sheffield Mutual Offer?

• Where Will My Money Be Invested?

• Can I Withdraw Funds from my Investments?

Why Choose a Sustainable Investment?

Choosing a sustainable investment strategy lets you rest easily, knowing that your money isn’t invested in potentially harmful industries like weapons manufacturing, gambling or pornography.

But instead of simply avoiding funds that don’t align with your principles, our sustainable investments allow members to invest in positive change by focusing on goals like sustainable infrastructure, fair business principles and transparent accounting practices, giving you confidence that your money is helping to build a better world.

Still not sure? In addition to being sustainable and ethical, our Sustainable Investment ISA also provides all the benefits of a standard ISA, including tax exemption on all gains and a contribution cap of £20,000 per annum to help you make the most of your money.

Please Note: Tax treatment depends on individual circumstances and may be subject to change in the future.

What Sustainable Investments Does Sheffield Mutual Offer?

At Sheffield Mutual, our business ethics are at the heart of everything. We offer two sustainable investment options to help you make ethical and sustainable choices while encouraging your money to grow: our Single Premium Sustainable ISA and our Regular Premium Sustainable ISA, both of which are unit-linked funds.

What Risks Are Involved With A Sustainable Investment ISA?

Our sustainable ISAs have been classified as a 4 out of 7 in terms of risk, which means we would consider it a medium-to-high risk investment, where the gains and potential risk may be above average.

What Is A Unit-Linked Fund?

A unit-linked fund pools all investors’ money together into one place. It uses this money to invest in different assets such as bonds and stocks & shares that you may not have been able to invest in as an individual.

When your policy is opened or if you add monies to it, you will be allocated ‘units’. The value of these units then fluctuates depending on the performance of the overall fund.

The value of your investment can go down as well as up and you may get back less money than you originally invested.  

Single Premium Sustainable ISA

Our Single Premium Sustainable ISA is an investment offered by Sheffield Mutual that can be opened with a one-off payment starting from as little as £100.

This ISA allows you to save on your own schedule, giving you the flexibility to make individual deposits into your account and watch your money grow. 

This fund is perfect if you want to add to your investments on an ad-hoc basis or with large deposits, as it offers you the ability to start, stop, top up or vary your investment whenever you need to, up to the annual ISA allowance of £20,000.

Regular Premium Sustainable ISA

We created our Regular Premium Sustainable ISA because we wanted to offer our customers excellent products that won’t negatively impact the environment.

The key difference here is that this ISA is designed for smaller, scheduled payments instead of individual deposits, allowing you to save over time while still providing all the benefits of an everyday ISA.

This is a great tool for regular investing, allowing you to set your strategy without worrying about making manual contributions.

In addition, every time Sheffield Mutual receives an investment of £10,000 or more into either of our Sustainable ISAs, we add a tree to our Sheffield Mutual Forest so you can see the change your investment has on the environment.

Can I Withdraw Funds from my Investments?

You can withdraw funds from either of our Sustainable ISAs at any time, with a minimum of £500 per withdrawal. However, our ISAs are designed as medium-to-long-term investments, and we recommend that you allow your funds to remain invested for at least 5 years.

Where Will My Money Be Invested?

Your money will be invested in a diversified fund, with strong Environmental, Social and Governance (ESG) characteristics, spreading the risk across different asset classes, such as equities, bonds and cash.

If one investment performs poorly, then you still have the others to fall back on. Active management within the fund generates additional returns through individual manager selection and adjusting the asset mix to suit market conditions.

As different asset classes perform well at different points in time, investing in a range of asset classes can help limit the degree to which the value of your investment fluctuates. However, please be aware that even a well diversified fund can fall in value, and you may get back less than you invest.

The Sustainable Fund is also net zero aligned and signed up to follow the Principles for Responsible Investment (PRI).

If you would like more information about our fund, please review our key information document to ensure you make an informed decision before investing. 

What is an ESG Initiative?

ESG initiatives are plans businesses undertake to move toward more ethical and sustainable business models. This is achieved by targeting three main areas; Environment, Social and Governance.

Environment

Having environmental ideals means investing in businesses whose practices positively impact the world around us. Whether this means investing in a manufacturing business specialising in reclaimed materials or a tech start-up looking for better ways to recycle, environmentally friendly investments grow your money while leaving a better world for the next generation.

Social

Social initiatives are business practices aimed at improving relationships between businesses, employees and customers. These work by focusing on improving employee satisfaction, establishing sustainable vendor relationships and creating opportunities for businesses to contribute towards education and healthcare initiatives, focusing on providing support for the people in our communities. 

Governance

Governance in ESG means paying attention to how companies do business. This means finding businesses that are transparent with things like accounting practices, business strategies and conflicts of interest. Investing in companies with high ethical standards ensures that all decisions are viewed critically and that every company we invest in matches our principles.

What are the Sustainability Disclosure Requirements?

The sustainability disclosure requirements are a set of measures put in place by the Financial Conduct Authority (FCA). The measures aim to improve trust and transparency when investing in assets which claim to be sustainable and to remove greenwashing within the investment market.

Earning a sustainability label means that an investment fund meets specific and strict criteria set by the FCA to ensure it is genuinely sustainable, and any claims we make are not misleading.

At Sheffield Mutual we are proud that the underlying fund has received recognition of its investment strategy by being awarded with a Sustainability Mixed Goals™ label from the FCA.

The mixed goals label means that the fund aims to invest mainly in a mix of assets that focuses on sustainability and aims to improve their sustainability over time. The label recognises our commitment to investing in assets that support and actively contribute to the ongoing improvement of a better society and healthier environment.

Ready to Feel Good about Investing?

If you feel ready to take your first steps into sustainable investing, please review our Sustainable ISA Key Information Document. You can apply for our Single Premium Sustainable ISA or our Regular Premium Sustainable ISA online, by post or over the phone by calling one of our friendly, helpful staff members on 01226 741 000.

This blog provides generic information and the writer's opinions and should not be relied upon for investment decisions. Sheffield Mutual has provided no advice. If you doubt whether a savings or investment plan suits you, consider contacting a financial adviser for advice. If you do not have a financial adviser, you can get details of local financial advisers by visiting www.unbiased.co.uk or www.vouchedfor.co.uk. Advisers may charge for providing such advice and should confirm any costs beforehand.