EP40 – Is not investing ethically a higher risk?

This week, I spoke with Portfolio Fund Manager Sacha E Khoury all about ethical investing and the journey she has been on throughout her education and career to arrive at this point today. 

As a financial advisor myself, there is a big question regarding passive and active management when it comes to Ethical Investing. It is an ever changing environment. So I was intrigued to hear from Sacha her viewpoint on how passive funds can manoeuvre the complexity of what’s ethical and what’s not.

As a studious young person who loved going to university and studying, with a natural talent for maths, she wanted to study something she was passionate about which led her to Beirut, studying economics and understanding how the world works & the way it’s interpreted on the macro side.

Through her experience she learned that to a certain extent, on the micro side, there was no further explanation to reality, because people are very irrational.Therefore the models in place certainly didn’t  map out how people behaved. So she decided to go and further her studies and do a masters in London, in finance, something that was more tangible because she always knew she wanted to end up working in investments.

Craving the interaction and dynamics of companies in the real world. Ones that employed real people whose activities directly impacted our economies around the globe, she wanted to use her life to create a positive impact and so as an investor investing almost exclusively in sustainable, ethical and responsible mandates she has been able to achieve just that. 

With a lot of research involved in her day, Sacha shares the importance in understanding what it is you’re investing in before you actually invest working with selected stocks and companies from the bottom up. She would meet with teams, have discussions with industry participants then conduct a financial analysis and when that is done she would need to make sure that the investment thesis is on track and check for any changes. Working in this way allowed collaboration with her responsible investment teams which is an in-house resource that they have had for over 20 years within her company. 

Sacha believes that it is a portfolio fund manager’s duty, to have conversations on a daily basis with companies to not only ask what they are doing, but to encourage and create more opportunities for having vulnerable conversations that lead them to improve their processes consistently. That this is in essence what active investing is all about. Even the best companies in the world can always do more to improve their impact. 

We invite you to listen to today’s podcast in a world where regulations and governance are changing all the time, so you can better understand how to keep on top of these changes leaving you feeling more empowered and confident around money. 

Click Here to listen to the full episode on Ethical Investing with Sacha E Khoury.