Oakham Wealth Management has gone all out to be the most sustainable business it could be, but discovered along the way that this space is far from straightforward when it comes to offering it to clients.
The discretionary fund manager embarked on a business overhaul in 2018, readying itself to become B Corp certified, and signing up to international sustainability charters such as the UN-supported Principles for Responsible Investment network and UK SIF.
Chief executive Paul Denley himself enrolled for the CFA environmental, social and governance module, among others, and did a Harvard course on sustainable business. "We really embraced it," says Denley.
But the result was not entirely what he expected, Denley notes, as it made him question the power of ESG investing, though he still believes in the merits of having B Corp status.
"Having learnt all about [sustainable investing] I'm a little uneasy about presenting that or going full on for clients in that respect," he says.
"I feel that as a boutique you have limited ability to make an impact and you then think, well what is it about?"
Oakham does not invest in oil and gas because most of the firms in the sector do not meet its other screening criteria in place.
It prioritises investments around the themes of clean energy, sustainable agriculture, water and waste management, healthy living and nutrition, but Denley says to really have an impact it would have to invest in green infrastructure projects, which are often too illiquid for his clients.
He says banks are in a better position to have an impact if they restrict their lending to bad actors. But as for investments, just because they are excluded from a portfolio does not mean they will not still be going on, he adds.
In a moment of self-reflection he says ESG is an area where goalposts are constantly moving, so "we just have to be careful what claim we are making. I wouldn't want to be held out for not fulfilling a claim or just not being as good as we should be."
Because some of Oakham's partners and growth areas are not in ESG, he says the firm is considering whether to remain a signatory to the UN PRI.
"There'll be a point where everything will be sustainable and at the margins on the outside you have these bad actors and unsustainable investment, which will still go on but it won't be within the retail investment sphere," he adds.
In the meantime "we need to be doing the right thing for our clients and exactly what they want".
Oakham Wealth Management was founded in 2004 by Denley and a former colleague at one of his earlier jobs at Berry Asset Management, now Bordier UK.
The firm initially catered for private clients and ran managed funds, but when Denley took over the helm in 2014 he decided he wanted further diversification and brought in managed portfolio services for IFAs.
