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Ian Chesham: “There have been many false starts...but you can see true momentum now'

03 May 2022 Expert insight

Genuine sustainability requires commitment across your organisation.

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Although charities, universities and religious organisations have traditionally been at the forefront of driving ethical and responsible investment, more and more environmental, social and governance (ESG) investing is gaining traction across a variety of sectors.

“There have been many false starts when it comes to responsible investing, but you can see true momentum now,” says director in the charities team at Barclays Private Bank, Ian Chesham. “It will take time to make change happen but you can see how all companies are thinking about it within their own industry, and how they can have a positive effect. It is no longer about just transitioning to more sustainable practices but how to do it the right way – a just transition.”

With momentum driven by a passion within institutions, those financial managers that are not promoting sustainability are getting left behind, says Chesham. “If you’re not serious about responsible investing, you won’t win a client that is also serious about it. It’s one of the first things on a client’s mind.”

This has been accelerated partly by the pandemic and partly by portfolio performance over the last few years, says Chesham. There is also a greater general awareness of the role financial services plays in making change happen. “In order to drive change and have transition, you need financing. How do you get finance companies involved in transforming these businesses? How do you get them to provide lending to companies that do transition? For me that is very powerful because if you put conditions on every type of lending you do, that drives change faster than public pressure. I think using the financial industry to flow capital into these changes is something that is slowly becoming better appreciated.”

Asking the right questions

With that awareness comes a responsibility to be informed about how your money is being invested. “Some financial companies see those large inflows of capital in the sustainable space and want to have some exposure, so have a quick product launch to capture that,” says Chesham. “It is important to find out how committed your advisers really are to ESG principles.”

The only way you do that is by asking the right questions. “You need to make sure that the people that advise you are skilled to the level they need to be, and for clients and prospects to have sufficient knowledge to ask the right questions. These could include: have you got a dedicated ESG team? Have you implemented ESG across all of your mandates? Are you providing training support materials to your clients and the wider community? This will help you decide on who should manage your money.”

Having a foot in both corporate and private banking gives Barclays insight when it comes to engaging charity clients to help them understand how responsible investing works and what it looks like in practice. “I’ve presented to many different charities and trustee boards, and explained the processes at whatever level is appropriate to them. So it could be very basic or more complex. There is a lot of material out there. If you want to find out about it, there’s enough information available for you to get a good grasp of ESG investing quite quickly.”

Practical solutions

Barclays also helps charities address sustainability within their own organisations. Chesham says: “A lot of charities are thinking about how they can cut their carbon footprint themselves? How do they improve their efficiency? This can present real challenges for small under-resourced organisations. They want to make changes but struggle to find the funds.”

For example, improving energy usage in an old hospice building can be extremely costly and may not save you money for many years, says Chesham. This can be difficult to justify to donors. To offer a practical solution, Barclays has partnered with Save Money Cut Carbon. “They can provide practical ways to help charities cut their carbon footprints. So we are thinking about how to give clients practical solutions in the same way as we do about investments. Now we can help you cut carbon within your own operations, as well as develop a sustainable investment portfolio. You can’t take things in isolation. Even if your investments are sustainable and ESG orientated, you have still got to think about your own challenges, how you can move towards carbon neutrality and what that looks like.”

This also helps charities understand the challenges faced by some of the companies in which they invest. Chesham adds: “It is about commitment and getting a greater understanding of what companies do and how they operate, the decisions they are having to make and gaining an appreciation of how far some have already gone.”   

What we do

Barclays Private Bank offers investment to charities and not-forprofits. Our team of dedicated sector specialists work with you to understand your requirements and create bespoke solutions that help meet your financial objectives in line with your organisations’ values. Our services include: discretionary portfolio management, with direct access to your portfolio manager; treasury and short-term cash management; liability-matching investment strategies; credit facilities; and access to private asset opportunities.

Fast facts

  • Over 60 years’ experience working with charities across the UK
  • Barclays Private Bank manages in excess of £100bn in client assets*
  • Used by the top 5,000 charities with 21.3% of the market share**

*Source: Barclays, 2022
**Source: Charity Financials Banking Spotlight Report, 2020

Ian Chesham is the Director, Charities Team at Barclays Private Bank

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