There are generalisations about women and investing: they are too hesitant, too risk averse, they have too many other calls on their finances, are not paid equally … are they generalisations? Excuses? Actualities?
The Wisdom Council which worked with companies such as Scottish Widow, St James’ Place and Vitality to attempt to tackle the gender pensions gap claims Women have simply never considered investing – even when they are part of a pension scheme, they don’t think of themselves as investors (75% of those polled didn’t know they were investors, even though the recruitment criteria included involvement in a workplace pension).
While auto enrolment may mean more people have access to pension saving and investments a key part of the advantage is missing if there is no active investment involved – which it won’t be if these women actually invested in pensions don’t recognise themselves as investors.
The Wisdom Council’s Yes She Can campaign research showed that the average woman’s pension pot is one fifth of the average man’s pension and at current rates, it will take 100 to 250 years to address the gap. Additionally 49% of women had never invested and, of those, 85% didn’t think investing was ‘for people like them’.
The statistics run on. According to the Fawcett Society women took home on average £564 less per month than men in 2022 (£536 in 2021) and possible because of or exacerbated by the cost of living crisis 53% of women would use the additional money to turn on heating and lights more often, and 48% report that their mental health would improve. For many the prospects of improving things are not overwhelmingly positive as 35% of women want to work but are prevented by reasons including a lack of flexible working options and affordable childcare.
Fidelity has for years research and campaigned on women and money. Its most recent research shows that while women are passionate about tackling societal and environmental issues, with 57% wanting to take action against climate change, 40% want to improve poverty and homelessness and 34% would like to influence positive change towards animal welfare, many are unaware of ‘the positive impact they could have through their pensions and investments, with 68% unfamiliar with Environmental, Social and Governance (ESG) investing.
This is all somewhat depressing and rather makes us women look a bit silly.
But not really when one considers Fidelity research into the ‘gender pay rise gap’, which based on ONS data shows that taking the average salary for a 25 year old women was £25,066 and for men £37,817. Were those salaries to rise by 1% in real terms each year the average pay rise every five years would be £1,284 for women and £2,017 for men. Salaries at retirement would be £49,682 for women and £75,748 for men. The respective pensions at retirement, assuming an 8% salary contribution would be £276,403 and £419,006 – a difference of £142,603. That’s a lot less available to spend on heating, lighting or childcare, on climate change, improving poverty and homelessness and animal welfare.
And of course, these issues impact on all of us, on all our worlds, male or female. Which makes us all look a bit silly. And it leaves the investment industry with a job still to do to attract more investors.
Stephanie Spicer is head of content at Quill PR
Mental health has routinely struggled to gain the consideration it deserves and since 2020, the pandemic has only exacerbated the situation for people of all ages, in schools, colleges and in the workplace.
When writing on the economy many national newspapers are claiming the phrase ‘winter of discontent’ and there are parallels to when the phrase was used to describe the winter of 1978/79 when the UK was beset by cold weather and striking workers. And here we are this winter facing – well, slightly warmer weather than we have had – but still strikes and threatened strikes.
It seems especially cruel that these strikes, these grievances on the part of many workers – some financial, some practical in how lack of resources impact on how they can do their jobs – has forced them to, in turn, impact the first Christmas and New Year when we should have been free to travel and associate, after the restrictions of the pandemic.
It is well accepted that COVID-19 had an impact on the mental health of many. One might hope as we steer a course away from the worst ravages of the pandemic (notwithstanding those with long-COVID symptoms and grieving the loss of loved ones) that some equilibrium will return in how we work and how we play.
While a pandemic, a cost-of-living crisis and a war in Europe may all have meant many folk have found themselves struggling, there have always been mental health problems for individuals – at home and in the workplace and for myriad other reasons.
For employers, mental well-being in the workplace is being talked about more. The inference of course is that ‘mental health’ is a problem and that running alongside it is ‘mental healthy’. This, ie, the acknowledgement of mental health problems is a good thing but that doesn’t mean it is easy to recognise or deal with it. The business cost of poor mental health amongst employees is increasing and in 2022 the cost for UK employers rose to £56 billion, according to Deloitte.
So without putting it down to a financial cost issue alone (although if it works to get it addressed, so be it) it needs to be recognised that ‘mental health problems are no longer ones we pretend do not exist or are conditions to be ashamed of or scared of. They are to be talked about.
For the employer there has to be a discussion of what resources to put in place for employees. Most employers with human resources departments will have these covered, which is not to say it is easy for the average line manager to spot a team member struggling – or even for that team member to.
There are many sources of advice from charities and employer/employee institutions.
The Chartered Institute of Personnel and Development has much to offer on wellbeing at work and understanding ‘the links between work, health and wellbeing, and the role of stakeholders in adopting an organisational approach to employee wellbeing.
And the Health and Safety Executive in its Management Standards highlights key areas of work design ‘that, if not properly managed, are associated with poor health, lower productivity and increased accident and sickness absence rates’:
The HSE also provides guidance for employees in how to look after themselves at work.
‘Our research confirms that a culture of fear and silence around mental health is costly to employers,’ says the charity Mind.
Often, Shakespeare is misquoted out of context. But when he had Richard II speaking of “the winter of our discontent” – the follow through was that it was “made glorious summer” (by an end to war). The time ahead was (broadly) looking good.
May we wassail and hope for that end to war – and to all battles – and as a country and as individuals ensure there is support and contentment for all.
Sarah Gibbons-Cook is director and Stephanie Spicer, head of content at Quill
Photo by Mat Napo on Unsplash
Inflation at 10.7%1 is focusing investors on how to protect their investment portfolio. Consensus among Alliance Trust stock pickers is that it’s all about the company pricing power of the underlying stocks within your portfolio.
Bill Kanko, founder and president of Black Creek Investment Management says: “Over the long-term, investing in equities is a reasonable inflation hedge as revenue, cash flows and earnings adjust to the environment of higher input costs. Over shorter periods, this is not necessarily the case given rising inflation tends to be associated with declining stock prices.
“High growth stocks with little or no present earnings and cash flows are much more sensitive to the higher interest rate environment as central banks raise rates to counteract inflation. Companies that are reasonably valued and have current cash flows and earnings should be less affected by rising interest rates.
“In an inflationary environment where real bond yields are higher, investor interest will broaden out beyond the winners of the past decade (i.e., high growth companies) to other areas of the market, including ones that are more economically sensitive.
“In the short-term, stock price movements will react to the impacts of higher inflation and interest rates. However, we take a long-term approach to investing and believe that the winning businesses that we seek should fare better in this environment relative to the broad market.”
Rajiv Jain (pictured above) chairman and chief investment officer at GQG Partners says that during inflationary periods, he attempts to optimize the construction of his portfolios in two ways.
“First, from a sector perspective, we will look to increase our exposure to names that traditionally exhibit strong pricing power, as long as those stocks continue to be reasonably valued. In addition, certain business models such as Visa Inc. have revenue that is partially driven by the dollar amount of transaction volume, which may act as an inflation hedge.
“Second, we may increase our exposure to select countries where the management teams are experienced navigating inflationary environments, particularly in India and Brazil.”
Jupiter’s head of strategy for value equities, Ben Whitmore cautions that while equities have proven a hedge against inflation over time, they react poorly to begin with to unanticipated inflation or a change from low to high levels of inflation. This can be seen in the 1970s and now to a degree.
“Real assets (commodities, property) have historically proven a good hedge against inflation. Furthermore, companies that can raise their prices in line with inflation have also proven a useful hedge. The portfolio can also be protected by the starting valuation. High inflation leads to high interest rates and this tends to favour companies where the value of the business is more determined by near term cash flows rather than businesses that are valued off cash flows a long way in the future. Low valuations tend to triumph as a result over high valuations.”
Jonathan Mills, co portfolio manager at Metropolis Capital agrees: “As part of our quality analysis, we assess whether each company in the portfolio is able to at least offset increases in input costs by raising their own prices. We believe that they are all able to do so, largely because of very strong customer loyalty and lock-in.”
George Fraisse, founder and principal at Sustainable Growth Advisers agrees that a key characteristic he looks for in companies is strong pricing power.
“We want companies that sell products or services that will allow them to protect their profit margins over the long-term,” he says. “Accordingly, our companies should be able to maintain their predictable and sustainable growth better over periods of higher inflation. We avoid commodity oriented companies which are reliant upon more cyclical demand to support the pricing of their products.”
CT Fitzpatrick, founder and chief investment officer of Vulcan Value Partners says: “Companies that have pricing power can often pass through higher costs to their customers, creating some inflation protection for their shareholders. In addition, companies with pricing power may pull forward free cash flow, reducing equity duration, and offsetting the negative effects of higher interest rates, which typically accompany higher inflation.”
Stock selection is key he adds saying that most businesses don’t have pricing power. For those that do: “While rising inflation can have a near-term negative impact on stock price performance those companies with pricing power should not see a negative impact to estimates of intrinsic value.”
An example of a company with pricing power which Vulcan holds is Aerospace manufacture, TransDigm Group.
Sunil H Thakor, research analyst and co-portfolio manager of the Sands Capital Global Leaders and International Growth strategies highlights the sort of businesses that are largely immune or can even benefit from rising inflation.
“Many businesses that meet our criteria are asset-light—built on intangible, rather than tangible assets—and have limited sensitivity to global supply chain disruptions and fluctuating raw materials prices. We seek to own businesses with strong balance sheets and low debt, resulting in muted interest expenses.
“We also seek to own businesses that have market-leading positions, delivering must-have products and services. This often results in pricing power. The best pricing power, in our view, is ad valorem, where businesses capture a transaction fee; this results in a higher fee—and more revenue—as prices rise. Typically, these companies have costs that aren’t directly linked to revenue generation, so an inflationary environment is actually margin accretive.”
Stephanie Spicer is head of content at Quill PR
Quill is delighted to congratulate clients, AVI Global Trust, AVI Japan Opportunity Trust, Capital Gearing Trust and Odyssean Investment Trust for their wins in the Citywire Investment Trust Awards 2022.
Over 70 investment companies were up for one of just 19 prestigious awards.
Awards are given to the closed-end funds on the London Stock Exchange with the best three-year performance in their categories to the end of August.
Investment trusts are ranked on their ‘information ratios’, rewarding funds with the best risk-adjusted growth in net asset value (NAV) against their benchmark index. This is a method used by analysts to calculate how much underlying investment return a trust gets for each unit of risk it takes against a stock market index.
In four private equity, infrastructure and property sectors, where investment trusts’ assets are valued less frequently, the information ratio does not work so well so performance is simply measured as the best NAV growth in the three-year period.
The August cut-off point meant the period of measurement did not include the stock market slump in September, or the more recent post-Budget selloff, which will affect the latest returns of all funds.
But that is not to detract from these worthy wins.
AVI Global Trust won the Global Equities category, up against the likes of MIGO Opportunities Trust, Oryx International Growth and Scottish Mortgage Investment Trust.
AVI Japan Opportunity Trust won over Atlantis Japan Growth Fund and Schroder Japan Growth Fund in the Japanese Equities category.
Joe Bauernfreund, chief executive officer and chief investment officer of Asset Value Investors said: “I am delighted AVI Global Trust has been recognised as Best Global Equities Trust. Our focus has been on buying good quality businesses trading at attractive valuations, and combining this with active engagement to unlock value at our portfolio companies; enabling them to thrive. The Trust’s unique and differentiated strategy continues to deliver consistent returns and we remain confident in our portfolio’s long-term prospects.
“AVI Japan Opportunities Trust was launched just four years ago so winning the Best Japanese Equities Trust is a wonderful validation of its investment strategy. The focus on building a concentrated portfolio of quality small-cap, cash-rich companies, combined with constructive shareholder activism, has unlocked significant value at a number of our holdings. We continue to find compelling opportunities and remain excited by the future prospects of the Trust.”
Odyssean Investment Trust won the UK Smaller Companies category beating JPMorgan UK Smaller Companies Investment Trust, Miton UK Microcap and Schroder UK Mid Cap.
Stuart Widdowson, portfolio manager at Odyssean Capital said: “We are delighted to have won the Citywire UK Smaller Companies Investment Trust of 2022 award. And we are especially honoured given such esteemed competition. These are challenging times for all investors but also probably times of opportunity for committed investors with a long-term investment horizon.”
Capital Gearing Trust won the Global Multi-Asset award beating Invesco Select Balanced Risk Allocation Fund Share Portfolio, Personal Assets, RIT Capital Partners and Ruffer Investment Company.
Peter Spiller, chief investment officer at CGAM said: “In a pool of impressive peers, I’m honoured for Capital Gearing Trust to be recognised as Global Multi-Asset Fund of the Year. The delicate balance of capital preservation and wealth generation is a responsibility we don’t take lightly and I was pleased to accept this on behalf of the entire team.”
Sam Emery, managing director of Quill said: “I am delighted – as are the whole Quill team – for these clients and their excellent and well-deserved wins in this very respected awards event.”
Photo credit: Alex Tecson for Citywire
Quill PR is delighted to welcome to the team Emma Taylor as Account Executive. Emma has recently graduated from Birmingham City University, where she studied Fashion Branding and Communication. She brings to the team digital media, with experience in creative design across media. This is a first for Emma as this is her first full-time role since graduating in the summer and her first role in personal finance and investment – a sector she is keen to venture into.
At Quill Emma’s role is to provide background administrative support to the whole team and Quill clients with the ability to apply her creative design skills.
Emma says: ‘’I’m very happy to be starting off my career at Quill. Working for such an exceptional and highly regarded company is amazing. I’m excited to learn about the finance industry and to see where it takes me in the future!’’
Sam Emery, managing director of Quill added: “We first met Emma over a year ago when she assisted with a Quill event and stayed connected as she finished her degree. We were delighted that she wanted to break into public relations and to do so by joining Quill. She is already proving an invaluable member of the team, getting to grips fast with the industry and our clients.”
Quill PR celebrates the life of Her Majesty Queen Elizabeth II and mourns the loss to her family and to the nation. Rest in peace Your Majesty. God save the King.
The death of Her Majesty Queen Elizabeth II came as a shock to many who had seen her smiling brightly to her new Prime Minister and even to the old one, just two days previously. Her death was going to be sooner rather than later but nevertheless it made our nation stop and reflect on a momentous event: a very real and great loss.
Did we need to know our Monarch personally to feel this? We did not need to know her personally nor her us. Respectively we meant something to each other purely by our existing – Her Majesty as our Queen and us as her public.
Something we understand, given the business we are in, is that the Queen was the best PR person this country could ever have had. Some individuals she met will have inspired her in some way and she has inspired. And many more will have learnt more about the Queen and her life in this past week than they had previously known. The week of mourning has allowed this.
A period of mourning is important for many reasons: it is a show of acknowledgement of a loss, a respect for that person who has died and it is a time of safety for those grieving to be allowed to grieve and have that grief also acknowledged. It is rarely given the prominence we have seen it given in the last week for the Queen.
That is something that could change – that we understand that a time of mourning should be in place for all people as they experience the death of a loved one.
While the Royal Family has a further week of mourning, as a nation we go back to work and normal lives and move on. But as we do, now is a good time to take something else with us – one of the final things our Queen left us with – a reminder of how we can be a nation brought together (in the main) in unity (even republicans expressed condolences and respect for the Queen’s life and work).
So as the headlines return to news and comment about inflation and interest rates and the impact on investing and on stock markets fluctuating and sterling losing against other currencies and the cost-of-living crisis and decisions for some as to whether to heat or eat, all things that could unite us but could also divide, let’s focus on the unity.
The Sunday Times ran a story Economy braces for chill as the nation mourns, reporting that restaurants, bars and concert venues saw bookings cancelled following the death of the Queen and economists warned that the national holiday for the funeral will lower output by £2bn making GDP shrink for a second consecutive quarter – the technical definition of a recession.
After all, the important things are really all about the money – yes?
As we enter what for many will be a difficult winter, with talk of privations and crisis, unity should mean we reflect as to whether it is for some a crisis or just a difficult time and how, as a society, we need to help those for whom it really is a catastrophe.
Photo by Simon Hurry on Unsplash
Digital banking is not helping with the loss of mainstream banks on our high streets and the competition from so-called ‘challenger’ banks. As customers are facing cost of living concerns how banks respond is key.
The Competition and Markets Authority recently commissioned customer surveys to glean whether and on what basis individuals and businesses would recommend their current account banks.
The results were not great for the traditional high street banks even where they are not on the high street but were for the challengers and the digital operations on the market.
Overall, the top-ranked personal current account providers in Great Britain were Starling Bank, Monzo and first direct. Bottom of the list were: Royal Bank of Scotland, Virgin Money and TSB.
Overall, the top-ranked business current account providers in Great Britain were Starling Bank, Monzo and Handelsbanken. At the bottom were: The Co-operative Bank, Virgin Money and HSBC UK.
In response, several banks specified a focus on digital: quoted in the Financial Times Virgin Money spoke of “investment in compelling customer propositions and digital innovation”; TSB of “evolving our digital services” and HSBC of having “simplified a number of processes and introduced more digital tools”.
The question is whether it is easy to add on such tools and be a match for the fintech operations that are unencumbered by demands for high street services. Investment houses don’t have walk-in sales premises – do banks need them anymore?
One such fintech operator Tide (Tide Platform Limited) managed to achieve fourth spot for overall service for business current accounts in the survey, third place for online and mobile banking services and fourth spot again for relationship and account management.
Tide only set up in 2015 providing mobile-first banking services for small and medium sized enterprises. It enables businesses to set up a current account and get instant access to various financial services (including automated bookkeeping and integrated invoicing).
As one of the first digital-only finance platforms in the UK to provide current accounts for businesses, one wonders when next the CMA looks at the sector, how many digital-only operators will have ousted the high street names.
Beyond current account facilities – when it comes to lending, elsewhere on the market there is iwoca, one of Europe’s largest small business lenders.
Research by iwoca reveals that despite rising economic concerns, 93 new businesses were created every hour across the UK in the first half of 2022. Analysis of Companies House data reveals that over 402,000 businesses were registered in the UK between January and June 2022, an increase of 18% from 340,500 over the same time period in 2021.
Seema Desai, iwoca’s Chief Operating Officer says: “Despite the prevailing headwinds of an impending recession, we are encouraged to see that so many businesses have been created during the first half of this year.
“As many of these businesses struggle with cash flow in the coming months due to skyrocketing business costs, it is vital that lenders step in to provide a helping hand.”
Iwoca says it does this, adapting to the needs of small businesses by deploying the latest embedded technology.
The high street names, that have SME lending arms may also be facing swifter/slicker competition from such fintech lenders, as they are in their current account offerings.
At the 10th anniversary of the Olympic games in London, the recent Commonwealth Games in Birmingham and England’s Lionesses winning the UEFA European Women’s Championship, there has been much talk of legacy and the right goals.
Did the Olympics turn us into a nation of active beings? Will the Commonwealth Games? Will we pitch up to watch women’s football at league level? Will girls get to play football at school?
During the pandemic lockdown we were – most of us – very good at pounding out for our hour a day of exercise – some of us carried it on afterwards – but many who were active pre-lockdown never got back to the same level of activity once the restrictions were lifted.
Whatever the level of enthusiasm in the moment, it rarely profits us in the way we might hope. Considering the UEFA Women’s Euro, it may be a numbers game, as 17.4 million tuned in to watch the final with 5.9 million on digital streaming, attendance at Wembley was at 87,192 the largest for any European game, overall 480,000 attended the tournament, Sarina Wiegman’s team is unbeaten in 19 games, has scored 104 goals and conceded just 4.
Some of the numbers, however, are less than inspirational: the average salary for a Women’s Super League player is £47k a year while some of the top male players can earn £300k plus a week.
A class of their own, but not yet
What of the legacy from the Euro Cup tournament and the call for girls to be given the option to play football in PE? The Department for Education (DfE) is not apparently committing to making sure that girls have equal access to football in schools, even after the Lionesses’ win in the Euros.
‘Government guidance published by the DfE fails to guarantee that girls be offered the same football lessons as boys but says they should instead be offered ‘comparable activities’.
According to Sport England there are 313,600 fewer women than men who are regularly active, when asked, 13 million women said they’d like to do more sport and physical activity and four in 10 women are not active enough to ensure they get the full health benefits.
Women drop out of sports because they lack access, says the Women’s Sports Foundation, adding that girls have 1.3 million fewer opportunities to play high school sports than boys have. ‘Lack of physical education in schools and limited opportunities to play sports in both high school and college mean girls have to look elsewhere for sports –which may not exist or may cost more money. Often there is an additional lack of access to adequate playing facilities near their homes that makes it more difficult for girls to engage in sports,’ it says.
And why should they stay in sports? According to the Foundation: ‘Through sports, girls learn important life skills such as teamwork, leadership and confidence.’
Perhaps the legacy we should really hope for in society is that which relates to diversity in our schools, on the pitches and in the workplace.
As the Chartered Institute of Personnel and Development (CIPD) says: ‘To reap the benefits of a diverse workforce it’s vital to have an inclusive environment where everyone feels able to participate and achieve their potential. While UK legislation – covering age, disability, race, religion, sex and sexual orientation among others – sets minimum standards, an effective inclusion and diversity strategy goes beyond legal compliance and seeks to add value to an organisation, contributing to employee wellbeing and engagement.’
One could fear that the legacy of the Euro cup will be purely financial – with little of the available financing reaching the masses – or the women’s game.
Not that it’s very easy to invest in football and certainly not women’s football. As one fund manager said: “All the women’s football clubs are currently loss making and are being subsidised by their male counterparts.”
Individuals can only buy shares in a football team if the shares are publicly traded and the club is not privately owned.
Or they could invest via funds like Lindsell Train Global Equity Fund which invests in PRADA SpA, Celtic plc and Juventus FC SpA or Lindsell Train UK Equity which invests in Celtic and Manchester United.
But the real investment is in encouraging our girls and our boys in playing football together and then on equal terms as they get older. The real legacy as a society, as investors, and as employers is to invest in the goals of our young people, the goals of our employees, and, where diversity and inclusion is concerned, not to score own goals.
Photo by Markus Spiske on Unsplash
The march of AI or artificial intelligence is truly upon us, highlighted by the fact that as I type, my keyboard is predicting what I am going to type next, and is often correct. Gosh, so predictable!
At an extremely interesting client presentation recently, fund managers from the Sanlam Artificial Intelligence fund explained to us that “Things that people called ‘pipe dreams’ when the fund was launched in 2017 are now happening. The changes have been utterly extraordinary. What was impossible is now possible.”
A fascinating timeline showed how algorithms have achieved superhuman levels in chess and other games such as Go in a very short space of time, and how AI platforms were teaching themsleves to walk, create their own languages and understand human vocabulary at an increasingly exponential speed.
There’s no doubt that changes brought by AI within healthcare, agriculture, transport (to mention a very few) are literally saving lives and may help to save the planet.
However, the very night after this event, I was reminded about the limits of AI in the arena of customer service. One area where chatbots and robots haven’t quite nailed the human touch yet.
My teenage daughter and her friend had arrived at a hotel in Portugal late at night, to be told that their room booking had been cancelled by the online booking service they’d used months earlier. This was human error (or greed) on the bookings service part, no robots at fault there. However, her booking was confirmed so a bit of a disagreement ensued but as the hotel was now full, she needed to contact them as they now had nowhere to stay. So then she (in Portugal) and I (in London) tried to communicate with the bookings company to get the issue sorted. We both experienced the same fate…
The phonecall was answered clearly by a robot – who requested the confirmation number. That was easily done. There then ensued some fake typing noise, I suppose to suggest that someone was actually typing into a computer to check something out, before a robotic voice informed that they had been waiting too long for our information and would have to end the phone call. At gone midnight – and having gone through this process twice I was definitely not impressed. The situation was not resolved until the following day – and took human intervention via twitter direct messaging to sort out.
While AI is clearly the future, companies should beware that they are not jeopardising their hard-won reputations for short-term cost savings. The message is that the nuances of real life problems often need to be resolved by humans; and human customers are not happy when they have to battle with companies’ attempts to deflect issues to our robot brethren, before they are quite ready.
Photo by Alex Knight on Unsplash
We are all thinking about how we can do good, do better, do the right thing when it comes to our communities and our global village. In a nod to ‘giving experiences not things’ – and in recognition that when it comes to ESG – the ‘S’ has been on the back burner – companies are increasingly looking to make a difference rather than a donation. And one such difference and an experience and a donation, is the notion of the 1% Club.
Matt Norris, who runs a fund investing in Real Estate Investment Trusts (REITs) has written about this initiative for companies to invest 1% in meaningful projects, taking inspiration from a particular REIT, the purpose built student accommodation REIT, Unite Students.
A decade ago, Norris highlights how Unite Students created the Unite Foundation to provide “accommodation scholarships for care leavers and estranged young people.” The Foundation has a clear social purpose, seeking to “transform the lives of young people by enabling access to higher education.”
In the past ten years, the Foundation has awarded over 500 accommodation scholarships to students who lack the support of a family.
“This initiative clearly aligns the commercial side of Unite’s business with the delivery of positive social impact for students and communities over the long-term,” says Norris, adding “It’s worth noting that over this same 10-year period investors in Unite Group have benefitted from strong returns too.”
And now to increase the significance of this commitment, Unite Students now targets to invest 1% of profits into social impact initiatives annually. Norris hopes that as investors grapple with how to assess the social impact that companies are making on wider society then such initiatives may grow.
He asks whether this could be the making of the 1% Club, whereby REITs allocate space equivalent to 1% of their annual profits to relevant good causes.
For example, he says office REITs could allocate space in their latest campus developments, as opposed to the stuff earmarked for near-term demolition, with a rental value equivalent to 1% of their profits to charities. Or shopping centre REITs could allocate 1% profit equivalent space to youth centres looking for a town centre home. He adds that such actions are clearly measurable, helping to bring clarity to the ‘S’ factor and potentially move it up the ESG agenda.
And of course, it isn’t just REITs with space to proffer to communities that could take the 1% idea – on a corporate, individual, national and local governmental level where there is office or retail space (flats above shops) being under-utilised or just plain left empty – with imagination and effort we could be creating social spaces, living spaces, homes for homeless.
Now that is doing the reit thing.
Photo by Brooke Cagle on Unsplash