Investing in a fairer world

01 March 2019

4 minute read

Fairtrade is a movement for change that helps get a better deal through our shopping choices. We look at ways to ensure both the products we buy and the investments we make have a positive impact on the world.

Who’s it for? Investors with basic investment knowledge

Please be reminded that this article serves to illustrate how it is possible to invest in line with this theme. In using the funds and companies as examples, this does not constitute a recommendation to invest in these, or any other investment. Barclays has not undertaken a review of these funds, nor are they part of a Barclays Select list. If you’re not sure where to invest, you may want to seek independent advice. Investments may fall as well as rise in value; and you could get back less than you put in.

What you’ll learn:

  • What Fairtrade Fortnight is
  • How the Fair Trade movement has evolved
  • How you can ensure your investments make a positive contribution to the world

Fairtrade Fortnight kicked off on 25 February, when thousands of individuals and companies show their support for those who grow our food in developing countries.

The aim of the campaign, run by the UK charity the Fairtrade Foundation, is to make trade fairer by encouraging shoppers to look for the Fairtrade Mark when buying their groceries. Buying food with the Mark means that it has been sourced from employers who operate a fair deal for their workers and employees.

This year, the focus of Fairtrade Fortnight is on people, in particular women, who grow cocoa and who are often badly paid and exploited. According to the Fairtrade Foundation, a cocoa farmer in West Africa needs to earn £1.86 each day to achieve a living income which will cover essentials such as medicine, clothing and school. However, currently a typical farmer in Cote d’Ivoire lives on around 74p a day.1 Women are often worst-affected, having to look after children, plant, harvest and carry water, as well as having to transport the cocoa beans to market. Fairtrade wants to raise awareness of the issues facing cocoa farmers, with the hope that eventually they will all be paid a living income.

How the Fair Trade movement has evolved

Fair Trade has become a global movement since the first formal ‘Fair Trade’ shop opened in 1958 in the US. Fair Trade in Europe started at a similar time, when Oxfam UK started selling crafts made by Chinese refugees in its shops in the late 1950s.

The World Fair Trade Organisation now has over 400 members across 70 countries, with membership including over 330 Fair Trade Enterprises. The WFTO requires members follow 10 Principles of Fair Trade, which it verifies through independent audits. These include creating opportunities for disadvantaged producers, fair payment and good working conditions.2

Buying produce with the Fairtrade Mark is just one way to do your bit and ensure your money makes a positive contribution to the world, but it’s also possible to have a positive social and environmental impact and to support fair trade through the investments you choose.

Using your investments to create a positive impact

Many investors want their money to go into industries that will benefit either society or the environment through both the products and services they produce, and the way they operate.

One way to invest with a positive impact is through impact investing. When you invest for impact, an approach is to invest in companies that are creating positive social and environmental outcomes, whilst at the same time aiming to generate competitive financial returns. This impact must be measured and reported so that investors can see the social and environmental performance of their investments.

Find out more about impact investing

There is a growing appetite for investing with consideration for social and environmental impact, with Barclays’ research showing that over half of all investors are at least moderately interested in exploring this investing approach. Those aged under 40 are most interested in investing for the good of society, with the number of people in this age group making an impact investment rising to 43% in 2017, up from 30% in 2015.3

Some ways to invest for a fairer world

There are several different impact funds to choose from, but if you don’t want to restrict yourself to just one or two, one option you may want to consider is the Barclays Multi-Impact Growth Fund

Whilst it is managed by Barclays, it is made up of a range of specialist third-party funds run by teams, which have been chosen based on both our view of their potential for strong financial returns and strong positive impact around key social and environmental issues.

One of these underlying funds is the Janus Henderson Global Sustainable Equity Fund, which seeks to invest in global companies whose products and services are considered by the fund manager to contribute to positive environmental or social change and thereby have an impact on the development of a sustainable global economy.

For example, the fund currently invests in clothing manufacturer Gildan Activewear, which is committed to conserving the environment and has implemented tools and programmes to measure and track its environmental footprint and ensure its environmental sustainability objectives are met. The Gildan Code of Conduct encompasses the principles set forth by the Fair Labor Association and various other organisations, which aim to improve workers lives worldwide by ensuring goods are produced fairly and ethically.

Another underlying fund in the Barclays Multi-Impact Growth fund is the Jupiter Ecology Fund. The Fund invests in companies that are developing innovative solutions for the environment and display a positive commitment to the long-term protection of the environment. The Jupiter team believes that, as the world population continues to grow, there will be ever increasing pressure on natural resources such as water, land and energy, and that this should create significant and long-lasting investment opportunities. The fund was launched in the UK in 1988, and Jupiter has developed extensive knowledge of investing in this area.

Among the fund’s current biggest holdings is Regal-Benoit, which manufactures electric motors, mechanical and electrical motion controls and power generation products, and has a strict code of conduct in place to ensure ethical and committed relationships with all its suppliers.

Find out more about Barclays Multi-Impact Growth fund

Please be reminded that this article serves to illustrate how it is possible to invest in line with this theme. Using the funds and companies as examples, this does not constitute a recommendation to invest in these, or any other investment. If you’re unsure where to invest, seek professional financial advice.

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