The value of investments can fall as well as rise, and you may not get back the full amount you invest. Eligibility criteria, fees and charges apply. The content on this page applies to the Royal Bank Invest Personal Portfolio Funds (PPF).
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Our approach
Responsible Investing
What is responsible investing?
Responsible investing looks at a lot of different factors when deciding where to invest. This is commonly called “ESG” which stands for Environmental, Social and Governance. Alongside managing risk and cost, ESG plays a key part in deciding where to invest.
Even though Coutts are not able to control the ESG policies of third-party funds (funds managed by external asset managers over which we have no direct control) and the companies they invest in, they have ongoing communication with fund managers to retain oversight.
Responsible investing also forms part of their fund research and review when selecting fund managers and this helps them decide if they should invest or not.
ESG (broken down into Environmental, Social and Governance) is explained further below:
Environment
The impact on the environment. This includes carbon emissions, deforestation, water usage and packaging.
Social
The impact on society. This includes the treatment of staff, making sure supply chains avoid unethical labour practices, and the health impact of products.
Governance
The impact on the business environment. This includes accounting practices, negotiations with suppliers, attitude to diversity and contribution to a fair and stable market environment.
Coutts, our investment manager, is a Certified B Corporation as well as signatory and participant of:
B Corp certification means Coutts, our investment managers for Royal Bank Invest, consciously work towards providing responsible wealth management in line with exceptional levels of service.
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Our approach to responsible investing
We call our approach ‘responsible investing’ to signal that we consider the ESG issues that could impact the returns and resilience of your investments.
We believe strong management of ESG risks and opportunities are important drivers for the creation of long-term shareholder value.
ESG considerations are integrated into the investment process through:
For more information on how this is applied, please see the investment managers, Coutts, Responsible Investing Policy.
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The selection and monitoring of investments
The Personal Portfolio Funds are invested in custom-built and third-party funds, with limited direct exposure to equities and bonds. The custom-built funds are managed via our strategic relationships where Coutts, the investment manager, defines the investment parameters and ESG policies.
While Coutts does not define the investment parameters or ESG policies of third-party funds, they assess their climate strategies as part of our net-zero investment framework and consider responsible investing in our fund due diligence process.
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Voting and engagement
Voting and engagement (referred to as stewardship) are two methods Coutts use to influence and communicate with companies and encourage responsible behaviour.
Voting rights give Coutts a voice on potential company changes and engagement enables a longer-term, active dialogue to encourage improved disclosure and practices.
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Exclusions
As a responsible investor, the preferred strategy is to engage with companies, however, there are certain investments where Coutts believe that engagement will not be effective or where they decide to take a prudent approach until they gain sufficient confidence that the relevant issues can be addressed.
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Working collaboratively with industry
We understand that acting responsibly is a collective ambition or goal, and this is why Coutts works with some of the world's leading investor initiatives.
They take part in industry working groups to set standards around how they can best incorporate ESG practices into investment selection, and they join collaborative engagement initiatives to encourage companies manage material ESG risks and opportunities.
How responsible investing is part of our DNA
Climate change presents risks and opportunities which are different for every company and country. If companies do not manage these risks and opportunities well, their profitability and resilience could be impacted which in turn could impact your investments.
To manage the climate risks and opportunities in your investments, Coutts, the investment manager, have a long-term goal to reach net zero across all their assets under management by 2050. This goal aligns with the UK Government’s legally binding target to reach net zero by 2050 across the UK economy.
To find out more on our targets, progress and approach to climate change, please see our Entity Climate-related Disclosures Report and Product Climate-related Disclosures Report.
ESG factsheets
Get into the detail of the Personal Portfolio Funds with these documents, available to download and learn more.
Useful links
Investment guides
Whether you’re an experienced investor or just finding out what investing is, we’ve got a range of articles to help you understand more about investing.
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