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Responsible investment
How to invest responsibly in funds and shares
Important information: investing for longer increases the likelihood of positive returns. Over a period of five years or more, investments usually give you a higher return compared to cash savings. But investments can go down as well as up in value, so you could get back less than you put in.
The information on this page isn't personal advice – ask for financial advice if you’re not sure what’s right for you.
What is responsible investing?
Responsible investing is a catch-all term that describes a desire to use your investments to benefit society as well as yourself.
It encompasses everything from using Environmental, Social and Governance (ESG) factors to identify risks and opportunities, to investing in companies that make a positive, measurable impact on the environment and society.
There are many different approaches that sit under the responsible investing umbrella. They can be used on their own or together but should always be used to complement traditional financial analysis.
Learn more about what it means to invest responsibly, and the different approaches you can take.
Approaches to responsible investing
Sustainable investing
You can approach sustainable investing in different ways.
Funds that use one of these four approaches will be marked with a sustainability label.
Sustainability Focus
Funds invest in companies that are environmentally and/ or socially sustainable.
Sustainability Improvers
Funds invest in companies with the potential to improve their environmental and / or social sustainability over time.
Sustainability Impact
Funds invest in companies that aim to achieve a positive, measurable impact on the environment and / or society.
Sustainability Mixed Goals
Funds invest in a mix of companies that are already sustainable, have the potential to become more sustainable, or aim to achieve a positive impact.
Other forms of responsible investing
If sustainable investing isn’t for you, you can take a different approach.
These three alternative approaches aren’t mutually exclusive. In fact, most funds with a sustainability label will generally incorporate ESG Integration, Stewardship and Exclusions.
ESG Integration
Consider the environmental, social and governance risks and opportunities of the companies you invest in as part of your wider research. It could cover a range of different topics – from carbon emissions to data security and employee health & safety – that vary in importance depending on the company's size, location and industry. Our fund and share research includes analysis of how ESG is integrated in investments under coverage.
Stewardship
Interact with a company you invest in to drive positive change. Ordinary shareholders can use their voting power to drive change on issues they care about, but fund managers can often speak with a company's management team directly to make their views heard.
Exclusions
Screen out specific companies or industries that you believe do harm to society, or aren't in line with your moral values. Weapons manufacturers and tobacco companies are common exclusions.
How to invest responsibly
Responsible fund ideas
Discover which funds have made our shortlist and read the latest reviews from our Research Team.
Investing responsibly in shares
Put your principles into practice with our tips on how to analyse shares, across a range of sectors.
HL's commitment to responsible investment
Find out more about how we invest responsibly across our own fund range.
For more information, please see our ESG Investment Policy and Stewardship and Engagement Policy. Other relevant reports, including our Task Force on Climate-Related Financial Disclosures (TCFD) report and Sustainability Accounting Standards Board (SASB) disclosures below.