Delivering social value

'The need to invest in a way that will help to secure the broader social objectives that a client might have, such as limiting the damage caused by climate change or fair treatment of all in a supply chain.'


It is commonly accepted that the investment profession delivers social value by enabling clients to invest – individually and collectively. If clients were unable to invest they would find it more difficult to protect and compound the wealth on which they will rely during and after their working lifetimes. The alternatives – reliance on bank savings (that now commonly fail to deliver a real return) or additional investment in property (that can be illiquid, is more difficult to diversify and is a relatively inefficient investment from a societal perspective) – are unattractive.

The profession does so in a dependable fashion and, increasingly, also recognises the need to invest in a way that will help to secure the broader social objectives that a client might have, such as limiting the damage caused by climate change or fair treatment of all in a supply chain. Stakeholders identify a number of ways in which investment professionals can add value.

  • First, as described earlier, they should help clients identify the appropriate time horizon for the portfolio (and hence the portfolio’s assets), the targeted risk-adjusted return and the appropriate allocation for their assets. In doing so, they should also agree an appropriate benchmark for the portfolio’s return.
  • Second, they should help them to build the portfolio.
  • Third, they should attempt to deliver the client’s risk-adjusted return target and report on their performance against that target.
  • Fourth, they should work with the client to ensure that the planned approach changes in accordance with any change in the client’s needs or preferences and, finally, they should help them to adjust to changes in the performance of the portfolio and to changes in the market.

Stakeholders note that none of these tasks are simple to perform and that each creates opportunities for conflicts of interest to arise. That such conflicts are identified and mitigated or avoided is critically important and is one of the primary reasons why investment should be seen as a professional activity operating at the highest standards of ethical and professional behaviour.

Read more in our report.

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