What HL is doing to invest responsibly
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.
Our vision for ESG - environmental, social and governance - is to inspire confidence for our clients to invest for a sustainable, resilient, and successful financial future.DOMINIC ROWLES, LEAD ESG ANALYST
How we ensure responsible investment in HL funds
HL funds use an ESG-integrated investment process to invest in sustainable and resilient businesses which help generate sustainable revenues, profits and dividends.
HL fund managers have been integrating ESG factors into their investment processes for a number of years now, having been signatories of the Principles for Responsible Investment (PRI) since 2021. However, ESG best practice is continually evolving, and our ESG Investment Policy strengthens our commitment here. It helps make sure HL is using its influence to help build a better future for everyone.
Across HL fund managers’ equity and corporate bond investments, they are targeting a 50% reduction in the carbon intensity of their portfolio by 2030, relative to a 2019 baseline. To find out more about how they manage climate-related risks and opportunities please read their Taskforce for Climate-related Financial Disclosures Report and Climate Transition Plan.
Here's a closer look at the key things they're doing to invest your money responsibly across the HL Portfolio Building Blocks, HL Portfolio funds and HL Select range of funds.
The HL funds are managed by our sister company, Hargreaves Lansdown Fund Managers Ltd (HLFM).
We see ESG as an additional form of due diligence which allows investors to assess and understand the impact their investments have on both the environment and society, and how well they're governed. That's why we integrate ESG into all our funds.
All fund groups we invest with must comply with our ESG policy, which specifies that the fund groups we invest with must:
- Have set, or be in the process of setting, Net Zero targets for their Scope 1 & 2 emissions.
- Be a signatory to the UN-backed Principles for Responsible Investment.
We also integrate ESG into our selection process. Before selecting a fund or fund manager, we carry out detailed research to determine if the fund manager is both aware of the risks posed by ESG issues and is managing these risks effectively.
We also expect the fund managers we invest with to practice good stewardship by using their votes and engaging with the companies they invest in to highlight areas of improvement to management, where it is in the interests of long-term investors.
We invest in a combination of segregated mandates and third-party funds. Segregated mandates give us greater control over how their managers run your money. We therefore prevent them from investing in areas where we feel the ESG risks are unacceptably high. This includes:
- Companies that generate 20% or more of their revenues from oil sands extraction or thermal coal power generation and extraction (although we will consider thermal coal power generators where they have a clear plan to phase out thermal coal).
- Companies involved in creating controversial weapons (antipersonnel landmines, cluster munitions, biological and chemical weapons).
- Persistent violators of the United Nations Global Compact principles (a UN pact on human rights, labour, anti-corruption and the environment).
Where we invest in third-party funds, we have no direct control over the investments that the fund manager makes. In cases where third party fund managers invest in companies that violate the aforementioned exclusions, we engage with those managers to understand the reasons they invest in these companies, and any engagement that's taken place. We want to find out why they feel the extra ESG risks that come with these companies are worth taking. We report the results of our engagement to investors through our annual Stewardship and Engagement Report.
Here's a closer look at the key things our fund managers do to invest your money responsibly across the HL Portfolio Building Blocks fund range.
This is not personal advice. If you're not sure whether an investment is right for you, ask for financial advice.
Want to learn more?
If you want to learn more about responsible investing, see our responsible investment hub.
It includes helpful tips and tricks and investment ideas to help you get started investing responsibly.