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You can’t help but notice the media interest there currently is in the COP26 Conference being held in Glasgow, UK. Here’s a short, sharp summary of the main points:


What is COP26?

In a nutshell, COP26 is the United Nations’ annual climate conference. COP stands for “Conference of the Parties”.  Principally, it’s a gathering of country leaders, industry leaders and NGOs to discuss and hopefully agree the necessary urgent actions to limit the devastating impacts of climate change on the environment and our societies. COP26 comes in a year tainted by record temperatures and global natural disasters, from wildfires in California and Australia, to severe flooding in Turkey.

This year’s COP marks five years since the milestone Paris Agreement, the first international treaty on climate commitments.  The agreed goal is to limit global warming to “well below 2, preferably to 1.5 degrees Celsius, compared to pre-industrial levels” with the aim of achieving a climate neutral world by 2050.  COP26 will see the first review of Nationally Determined Contributions (NDCs), national emissions reduction targets since they were established by the Paris Agreement. It will be a major moment in understanding the effect of NDCs, a yardstick for global progress.


What does COP26 hope to achieve?

Four clear objectives have been set for COP26:

  1. Ensure global net zero by 2050 and maintain the achievement of the goal of
    1.5 °C
  2. Adapt to protect communities and natural habitats
  3. Mobilise finance to deliver objectives 1 and 2
  4. Formalise how signatories work together to address climate change


What does mobilise finance mean?

To achieve the other goals, developed countries must deliver on their promise to raise at least US$100 billion in climate finance per year. International financial institutions must play their part and work to unleash the trillions of dollars in private and public sector finance needed to ensure global net zero.

When it comes to investing we’re all well aware of the traditional routes of saving with banks and credit unions but we’re also becoming aware of the low return our money will see in these institutions. That’s why it’s time to consider alternative methods of investing such as ESG funds.

Current Situation

Households have been saving like never before. This is largely on the back of the Covid-19 pandemic which has led to lower consumption. Across the EU the household saving rates are at a record high of 24.6% while in Ireland, deposits are at record levels in excess of €120 billion.

With all these extra savings many have been turning to the traditional avenues of savings accounts in both banks and credit unions but being extremely disappointed when they realise their money is likely to see close to zero return!

That’s why we’ve decided to compare and contrast banks, credit unions and other options for investing your money, including ESG Funds -  more commonly referred to as Ethical or Sustainable Funds.


It’s a well-known fact that banks have been slashing their savings interest rates over the last number of years. With each year that goes by your hard earned cash is stagnating, often earning less than 1.00%. Most recently AIB made a large number of cuts to its savings returns with just three of the bank’s saving accounts now offering a return on your money. Already, Ulster Bank and Bank of Ireland have imposed negative rates on larger depositors.

Credit Unions

For many years now Credit Unions have been actively discouraging savings. Credit Unions across the state have introduced restrictions on savings above €40,000 but this restriction is reducing. In December 2020, Progressive Credit Union in North Dublin which has nine branches told its members that they must cut their savings to €15,000. This was due to a significant increase in deposits. Anyone who had funds over €15,000 were asked to withdraw the balance over this amount to allow the Credit Union to cope with regulatory requirements and negative interest rates. A Credit Union must keep a minimum of 10% of its total assets in reserves so the more it has in savings the more it must keep in reserve which reduces the amount it has available to pay out. Balancing this fine line means that the Credit Union is no longer a viable investment option for many members.

ESG Investments

With banks offering low to zero rates of interest and credit unions actively discouraging savings, where can you find a more strategic way of saving that will produce a good rate of return? That’s where ESG investments comes in.

ESG Investing offers a way for the public to invest in funds that consider environmental, social and governance issues.

If you’re looking for a profitable investment fund that you can feel good about then ESG funds are the perfect option. Investing in socially responsible companies is not only a great ethical choice but can also have excellent long term financial benefits.

ESG investments are gaining huge traction thanks to research showing that this method of investing can reduce portfolio risk, generate competitive investment returns and help investors to feel good about the investments they own.

The COVID-19 pandemic has strengthened the case for ESG funds with the market turbulence seen during this time providing evidence that the stocks of companies with strong performance on ESG issues are often less volatile. The COVID-19 pandemic helped to increase public awareness of social issues which fall under the ESG category while it also led to further decreases in banks interest rates.

Of course when it comes to investing in ESG funds, like all forms of investment there are some risks, the most significant of which is that there is no guarantee of return. However, its return/risk benefit should be weighed up when compared to non-returning options such as Banks and Credit Unions deposit/savings accounts.

Overall, ethical Investing is a smart choice for many which will help you to get the best value on your savings.

Ethical Investments: Your best choice

When it comes to choosing the best investment for your hard earned savings, the traditional routes of Banks and Credit Unions are no longer favourable. ESG funds offer the potential for great returns as well as reduced portfolio risk and the knowledge that you’re investing in something which will make a real difference. However, simply choosing an ESG fund is not a guarantee of success or that ESG funds are right for your financial goals. That’s why here at Linked Financial we offer impartial advice to help you navigate the complex world of ESG investing to determine which ESG fund, if any, is right for you.

Where can I get more advice on ESG Investments?

Here at Linked Financial, we are making a commitment to actively promote ESG Investing as a viable alternative to more traditional options for our clients. We will take you through our rigorous and interactive risk profiling and fact-finding process and recommend ESG funds for you which match your personal preferences. To learn more about ESG Investments be sure to read our blog that looks at the future of investing in ethical funds.

Get in touch with us here for an initial consultation and to discover the possibilities that ESG Investing can provide you

What does ESG investing mean?

ESG investing, which typically assesses the factors listed below, offers a way for the public to invest
in funds that consider environmental, social, and governance issues. Whilst ESG is recognised as the
collective name for these types of funds they are also known by terms such as "socially responsible
investing (SRI)" and "sustainable investing." So, what exactly does each of the areas covered within
the term ESG stand for?


Conservation & protection of the natural environment
Air emissions and air quality.
Energy use and conservation.
Natural resources and land use.
Waste management and water quality.
Hazardous materials use.


Relationships with employees, suppliers, clients & communities
Labour standards and employee relations.
Production quality and safety.
Local community impact.
Equal employment opportunities.
Health care, education, and housing services.


Standards for company leadership, risk controls & shareholder rights
Ethical business practices.
Board independence and diversity.
Voting rights.
Executive pay vs. employee pay.
Account and tax transparency.

At the heart of ESG investing is the simple idea that companies are more likely to succeed and
deliver strong returns 1  if they create value for all their stakeholders – employees, customers,
suppliers and wider society including the environment – and not just the company owners.
Consequently, ESG analysis considers how companies serve society and how this impacts their
current and future performance. ESG analysis is not just about what the company is doing today.
Consideration of future trends is critically important and should inherently include disruptive change
that can have significant implications for a company’s future profitability or its very existence.

Why should I invest my savings in ESG Funds?

By 2025, the so-called 'values-driven generation' – millennials – will represent three-quarters of the
global workforce. 1  A Morgan Stanley study found that millennials are twice as likely as the general
population to invest in companies with social or environmental goals. 2 And in North America alone
this generation, alongside Generation X, is set to share a wealth transfer in the region of $30 trillion
from their baby boomer predecessors in coming years.

The pressure from asset owners to invest responsibly and have a more sustainable mindset
therefore expected to grow significantly. Millennials are more concerned than previous generations
about putting their money into investments that are not sustainable and not harmful to the Planet;
so says Terry Smith, founder of asset management company, Fundsmith. This conclusion has been
backed up by research from Morgan Stanley, which found that 82% of high-net-worth millennials
express an interest in ESG Investing compared with 45% of all high-net-worth individuals.

There is the additional factor of the retail investor facing up to sustainability challenges and
strategically allocating their savings to companies and funds that can help make good long-term
improvements in the World in which we live.

The world faces major sustainability challenges – such as climate change, ageing population, and
inequality – which require radical solutions that will bring huge yet hard to predict changes to the
global financial system. By facing up to these challenges, recognising that capital allocation decisions
have a real impact on the world, and holding bold visions of the future, investors can hope to make
good long-term investment decisions.

What’s the impact of Covid-19 going to be?

Without as doubt, one of the consequences of the Pandemic on the investment landscape is that the
more astute investor has become more aware of the volatility that can occur in traditional markets
because of geo-national lockdowns. The supply and demand of products and services change very
rapidly when vast swathes of the world’s population are prevented from going about their normal
lifestyles. In Ireland, for example, the total shut down of the Construction Industry has led to a steep
fall-off in the number of completed new builds in 2020 and 2021. Perversely, this has led to
corresponding increase in house prices as the demand for housing has outstripped the supply,
particularly in the first-time buyer sector.

As restrictions ease, the increasing evidence is that people looking to invest their hard-earned
income and savings into pensions and investment funds generally, will look more diligently on where
their money is being invested. Companies and countries that are viewed as behaving badly or
potentially contributing to further interruptions of our lifestyles are likely to be regarded negatively,
especially by the younger “millennial” investors entering the marketplace for the first time. ESG
Funds represent a clear opportunity for this more discerning individual.

Can I invest in ESG Funds and still generate good rates of return?

While some businesses across the World are in Covid-19 turmoil a recently published research note
produced by HSBC Bank suggests that companies with strong ESG credentials are proving more
resilient than their peers.

The big question for investors is whether ESG Investing means having to accept lower rates of return
than more traditional investment strategies. Tobacco, Alcohol, Weapons companies have,
historically, generated consistently good returns for investors and Fund Managers so what will the
implications be for excluding them from your ESG compliant portfolio? Well, over the past 5 years
the FTSE 4Good UK Index has returned 60.31% against the FTSE 100’s 50.85%.

This Index measures the performance of companies demonstrating strong ESG practices and those included in the Index need to show they are working towards improved environmental management, climate change
mitigation and adaption, countering bribery, upholding human and labour rights and improving
supply-chain and work standards.

Meanwhile, in the US, the KLD400, the main ethical Index, returned 109.9% relative to 107.65% for
the more mainstream S&P 500. So, over the past 5 years companies with strong ESG credentials
have faired better in both the UK and the US stock markets.

How and where can I go to get advice on ESG Investing?

Linked Financial are making a commitment to actively promote ESG Funding as a viable alternative
for all our clients over the more traditional funding options. We will take you through our rigorous
and interactive Risk Profiling and Fact-Finding process and then recommend ESG Funds which are
available in the Irish marketplace and which match your personal preferences.

Talk to us today at or contact me, personally, for an initial consultation at

1. Big demands and high expectations, The Deloitte Millennial Survey, 2014.
2. Sustainable Signals. New Data from the Individual Investor, Morgan Stanley Institute for Sustainable
3. ”The Greater Wealth Transfer”, Accenture, 2012.