Money, She Talked – a shift towards sustainable finances

Money, She Talked – a shift towards sustainable finances

Published: 11 May 2021 Updated: 13 Jun 2022

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Highlights of this episode

02:06 – The four significant shifts towards sustainable finance
Deborah outlines the four significant shifts she is observing within sustainable finance

04:24 – Are women taking more agency?
Is there an increase in people, particularly women, taking more agency over their finances?

06:50 – Encouraging positive changes and holding companies accountable
Kate and Deborah discuss how it's important that financial institutions are held accountable and act as stewards when it comes to reinforcing positive behaviours at companies and engaging in sustainability and responsible investment.

16:12 – ESG is growing – but a lot can be labelled as ‘sustainable’
Kate emphasises how liberal use of the ‘sustainable’ label makes it hard for people to understand what they're getting - and if it is what they want.

20:33 – Are women averse to risk?
Deborah: ‘…the idea that women don't want to take risk, either with their money or in their careers needs to be debunked.’

Transcript: Money, She Talked – a shift towards sustainable finances

The following is a transcript of the podcast which has been edited for clarity.

Rebecca Davidson 0:01

Not long ago, people who chose to invest their money in line with their values were generally considered anomalies. The consensus was that you had to choose between making a decent return from your money or doing good with it. This is no longer. According to Morningstar in 2020, the amount of money in ESG funds across the globe reached US$1.65 trillion, and women are blazing a trail here (1.) Think tank Wealthiher’s 2020 research highlighted 89% of women want to make investments that are socially responsible (2.) This exciting topic is the subject of today's Money, She Talked podcast.

I'm Rebecca Davidson an investment director at Tilney and joining me in conversation is Deborah Gilshan, an independent adviser on investment stewardship, corporate governance, sustainable finance, and diversity. Deborah has more than two decades of experience in global institutional investment, and is also the founder of the 100% Club, which is dedicated to gender equality. We're also joined by Kate Capocci, who is the responsible investment lead at Smith & Williamson.

Rebecca Davidson 1:56

Q1: Good afternoon, Deborah, I know you have a real passion for the transformative power of investors’ money, and you've been championing sustainable finance for a long time now, can you please outline what's happening in the sector?

Deborah Gilshan 2:06

Thanks, Rebecca, and thanks to Tilney for the invitation to contribute to your podcast today. I think this is such an important podcast series, so I really applaud Tilney for the work that you're doing through the podcast series.

For me, having been in sustainable finance for over 20 years, it's been interesting to observe the shifts that are going on, which I think are interrelated. I think there are four significant shifts, which I'll talk about which are relevant to our podcast discussion today.

The four significant shifts towards sustainable finance

The first one is that I think there's a democratisation of finance happening, where the saver is being given tools to have more of a voice in what is being done on their behalf with their money, and how they hold their agents to account in the investment chain.

I think there's also a shift from a focus on shareholders to a focus on all stakeholders that a company is responsible for and this shift in the role that financial markets plays is also being driven through a much more holistic consideration of environmental, social and governance issues as sources of investment risk and return.

We've also got heightened expectations of investors to be good stewards of companies, and to hold companies to account on financial returns, and on issues such as supply chains, workforce and board diversity, executive pay, and corporate culture – and I think this is an important aspect specifically for women as savers.

I think the evidence that you opened-up with, around data indicating that women want to do more with their money, is really significant. I think the focus on women as savers and through this podcast series is particularly important as well. The Sunday Times was reporting that we still have a 40% gender pensions gap in this country (3.) So we as the financial services sector need to do all we can to engage women, and savings and investments. I think what we're talking about today is relevant to that, and again, it's why I think the work that you're doing to engage women is so needed.

Are women taking more agency?

Rebecca Davidson 4.24

Q2: Thank you. Kate, is that also a trend that you've seen? An increase in women taking agency over their savings and finance?

Kate Capocci 4:31

Absolutely, definitely something I've been seeing and even more in the responsible investments. Anecdotally, the majority of clients who come to me with a lot more interest in investing more responsibly, tend to actually be women. It’s really exciting to see that we're almost spearheading this new part of the industry that's growing and growing. So that's very exciting to see. I think there's a lot more work that can be done. I think there is, I'm sure as Deborah will tell us, still a bit of a lack of financial literacy among women in general, throughout the country, and so there's something we can continue to work with.

Rebecca Davidson 5.15

Q3: Deborah, do you think that this is a focus just on sustainability or just financial literacy across genders in general?

Deborah Gilshan 5:22

No. I mean, we talked about the ESG industry like it's something new. I think what's happened in the last 18 months, we had already seen quite a momentum with SG funds and more of a recognition of environmental, social and governance issues as sources of investment risk and return, prior to the pandemic. But I think that the pandemic has accelerated the focus on the social licence to operate, the focus on the wider impacts that companies have in society, and I think this acceleration was already building in this industry that I've been in and has been around for a long time. The role that investors claim, holding companies to account, is a fundamental part of finance as well.

I would caution not to think about it as new issues. But I think the interest across the investment chain, including wealth managers, is different. I think it's much more visible, and you have many more funds now that are integrating ESG considerations. The pace of change is definitely heightened, but it's an industry that has been building on a discipline that's been building for quite a while.

Encouraging positive changes and holding companies accountable

Rebecca Davidson 6.50

Q4: And then you mentioned accountability there, how do you think it's important that we, as financial institutions and other institutions, are held accountable for our behaviour when it comes to our engagement in sustainability and responsible investment?

Deborah Gilshan 7:03

I think this matters for all types of investments. We know one of the areas within sustainable finance is ethical investing, where you deliberately decide not to invest your money in sectors such as alcohol, tobacco and others. Whereas, regardless of where you invest, you should expect your investment managers, your agents in the investment chain, to be really assertive on how they hold companies to account.

In all of the debates I've been on recently about ESG investing it's a lot about fund, and it's a lot about ESG scores and data. A whole other piece of this is when we invest on behalf of other people, that institutional investors and wealth managers act as stewards of capital and hold companies to account for their behaviours as well as our financial results. I think it's an important part of how we give savers and investors more demonstration of what we're doing on their behalf. And I think it's a really important part of the sustainability finance picture.

Kate Capocci 8.13

I completely agree. I think as well, when a lot of people, especially traditionally, when they’ve thought of responsible investing, they’ve definitely thought more about ethical investing, or excluding things. Over the last few years, there’s definitely been a shift away from just excluding things you don't like and more talking to companies in encouraging better practices, and generally trying to make positive change and influence the way things are done, rather than having a blanket screen.

Rebecca Davidson 8:42

Q5: Kate, I know that you're very much responsible for how Smith & Williamson hold themselves accountable internally. Can you talk around the changes and shifts that you've seen from the business itself, in terms of how it approaches its own focus on stewardship?

Kate Capocci 8:58

Absolutely, this is something that definitely started more, in earnest, a number of years ago where we really wanted to get further involved in responsible investing, but also doing it in a way that actually made a difference and was impactful for our clients, rather than just using the buzzword of ‘greenwashing’ or just pretending we do one thing. A lot of the work we've done is very much on how can we use our clients’ assets? How can we work with clients in order to influence positive change and find those responsible investments?

So definitely on the stewardship, that's something we've done a lot of work on. It's almost quite difficult as a wealth management firm. The size of holdings, especially, are a lot smaller compared to the really massive asset managers, so our voice is a lot smaller.

Collaboration is key for smaller and larger investors

We've managed to be involved in a lot of collaborative engagement platforms, like: The Investor Forum, Climate Action 100+, Find it, Fix it, Prevent it - which have allowed us the opportunity to be involved in these far wider discussions with companies. I think the most recent one that I can remember was with Barclays over the climate change financing, and climate change targets. That was something we were able to be involved in, in collaboration with far larger investment managers as well, so we could definitely be part of that conversation and put our assets forwards as part of that.

Deborah Gilshan 10:31

I think the examples that Kate has given, talking about being a smaller wealth manager, also applies to larger investors as well, because there is now a drive for much more collaboration across all types of investors. I think that some of the issues that we're talking about here, like climate change and inequalities, are now huge systemic risks to the economy.

We need system level change, including through collaboration. When I worked for large institutional investors, we collaborated as well. I've been involved as an investor, through the 30% Club’s investor group, using collaborative initiatives of the collective voice of investors to engage on diversity. So, I think that collaborations will become even more important, not just for smaller investors, but as a more efficient way for the market to engage on some of these market-wide and systemic issues. The reality is that these issues manifest themselves in individual companies, but they also manifest themselves at a market level as well.

Initiatives, like the UN Sustainable Development Goals are really a blueprint, as they are described by the UN, for a better society and a better world. A lot of organisations are now aligning their investment products, and how they engage with companies through the Sustainable Development Goals as well. I think all these collaborations, plus top-down initiatives, are all part of the work that's going on within the industry.

Rebecca Davidson 12:08

Q6: And Deborah, as a market leader yourself, how important do you think it is that we have participation right from the top from our executives, the C-suites and boards?

Deborah Gilshan 12:20

Do you mean within investment houses or within companies?

Rebecca Davidson 12:23

In terms of championing the shift towards bringing in ESG and responsible targets as the mainstream, and not being aggregated as another part?

Deborah Gilshan 12:33

Yeah, I think you're seeing both, within fund management houses and large investors, as well as within companies themselves. Obviously, some fund management companies are listed companies, but the tone from the top and the endorsement of why ESG matters is different now. You’re seeing integration into remuneration targets, you're seeing integration into portfolio management performance criteria, you're seeing ESG strategy from companies trying to link some of these wider environmental and social and governance considerations, and how that's driving long-term strategy.

The move to net zero will be one of the most significant shifts going forward, and everybody has to be part of that, both companies as well as the institutions to finance companies. We have to move away from this little bit of ‘them’ and ‘us’. We are actually all in this together because of the societal impacts that some of these issues will have over the longer term.

Rebecca Davidson 13:47

Q7: Do you think it's important that KPIs and remuneration are linked towards a practitioner’s involvement in this area?

Deborah Gilshan 13:55

I think it's important, but I think you also have to ensure that you have robust independent remuneration committees who will make the correct decisions on the outcome of those targets. It depends what percentage of those targets relate to the short term and the long term as well. I'm encouraged, and it's great to see diversity targets linked to remuneration as well. But I think investors have a role to hold companies to account, and how they make those decisions about whether targets are met as well.

The focus is moving towards longer-term performance

Kate Capocci 14:29

I think the way finances normally worked was very short term on those kind of performance metrics, and that's what a lot of pay was linked to.

It’s the whole thing when we're looking at responsible investment, it's far more long term. We're looking for companies that will still going in 10-20 years’ time and transitioning into a low carbon economy, rather than being left behind. So ideally, I think when you see these sustainability-linked pay packages, these kind of KPIs that managers have, very much has to be focused on longer-term performance or almost separate from the overall share performance or other kinds of financial KPIs.

Deborah Gilshan 15:14

I think what's also interesting is that it's not just within shareholdings with an equity. It's actually very visible and fixed income, sustainability bonds. So last year, Alphabet, issued a sustainability bond, and one of the themes of their sustainability bond with racial equity. Schneider Electric, a European company, issued a sustainability bond and one of the measures was climate change and the transition, and also gender diversity. These considerations are beginning to appear right across the investment chain, in all types of investment products as well.

Rebecca Davidson 15:58

Q8: If we are thinking about female savers and their investments, what sort of products or services can be offered by an investment house like Smith & Williamson or Tilney?

Kate Capocci 16:12

Yes, there are plenty of different options, and as this space has been growing massively, there’s been the ability to tailor exactly what you want from your investments. Not only from a financial performance standpoint, but also from a positive impact or responsible standpoint in further growing and being able to tailor that.

ESG is growing – but a lot can be labelled as ‘sustainable’

There are plenty of MPS [managed portfolio funds] funds now where you can, even as a smaller saver, get involved in these more responsible investments, all the way up to where we are at Smith & Williamson, where you can have a bespoke portfolio completely built around your values for your investments. So, it's growing a lot. As is ESG, especially among younger generations, it’s becoming more and more important alongside financial performance. We're seeing more products being built which can reach the entire market chain, which is very encouraging. I would say I'm hoping, with incoming regulations, that it will become easier for savers. I think the only problem we have now is a lot of things can label themselves as sustainable. It's very hard for the underlying client to understand what they're getting – and if they're getting what they want.

There are so many strategies out there, and I don't think all of them can be accused of greenwashing, they just do things in one way, which has not been properly communicated. Clients who are invested in those are then unhappy with what they're getting, for example, some ESG portfolios could hold oil and gas companies. It's very much in the grey area. It's not an invalid approach if it does hold oil and gas, but it's definitely not for a lot of clients – and it's not what they want to see in their portfolio.

So, I think there needs to be better labelling and communication on exactly what these products are doing. But it's very encouraging to see more available, and all at different wealth points as well.

Rebecca Davidson 18:17

Q9: Okay, that's a brilliant point. You're looking at negative screening, positive screening, integration, thematic, do you think having such a wide breadth of offerings is a positive thing or could it be a hindrance if not well marked?

Kate Capocci 18:32

That's a really interesting question. It could be quite a hindrance only where people are not able to understand exactly what they're getting. Sometimes, you have a lot of clients who come to you and they know want to do something positive with their money, they know that they don't want to invest in any companies that are doing horrible things to the environmental and society, but they don't know much more than that.

Financial jargon – do you know what you’re investing in?

It's the same in the way of financial literacy. There's also sustainable financial literacy, which is a whole other layer on top. All these options out there are rather confusing because you don't understand what each of them mean, and half the time you don't understand what you're trying to achieve either.

There are different approaches that are very useful when you know how to use them –especially when you're creating a portfolio for a client, or when a client is putting portfolio together themselves But we need clearer labelling so it's very obvious. We can say, ‘Okay, this fund will screen out something’, ‘this fund will include positive themes’, or ‘this fund is about investing in the most responsible companies, regardless of sector’. But, keep it big and broad, and make those standard, so everyday clients know what they're getting into.

Rebecca Davidson 20:08

Q10: And Deborah, would you agree? Is that something that we as investment managers and investment houses need to take responsibility for – enacting and engaging with our clients better, to better articulate what is on offer and what they can achieve with their capital?

Deborah Gilshan 20:25

Yes, I think you just have to explain that clients have choices and that there is choice out there. If you want to have a certain theme that your money is invested in, there are opportunities available to you. I'm particularly interested in some of the gender diversity funds that are out there, and how you can allocate your own savings to them, but sometimes it's not as easy as that.

I think giving savers and investors a choice, but also, I do think there is an issue around financial literacy, more generally. Interestingly, the Financial Times is running a financial literary and inclusion initiative at the minute. I think jargon, by its very nature is not inclusive, and we do need to do a broader piece around educating everybody about the opportunity to save and invest. I think women are part of that as well, how we can make financial services more diverse and inclusive as an industry. Citywire estimates that will take us 200 years to get gender parity amongst portfolio managers (4.)

If we want women to invest in our stock markets, we need people who look like them, investing their money. It's as simple as that. So, I think it goes to the wider point about some of the initiatives that the industry is adopting, to address its own diversity and inclusion challenges as well.

Kate Capocci 22:01

I think it's a really good point, even within just standard investment – risk tolerance and capacity for loss, income – all these various things already that you're being asked to consider when you're making investments. When you want to invest sustainably, it's just an extra layer and it is too much jargon potentially. I'm not sure how we'd fix that, but definitely getting more people involved in the conversation would help.

Are women averse to risk?

Deborah Gilshan 20:33

I think the idea that women don't want to take risk, either with their money or in their careers, needs to be debunked. I think women want to understand risk more and understand the risks that they're taking with their hard-earned savings and investments and with decisions that they make in life in general.

I get a bit tired of hearing that women don't want to take risk or their risk averse. I think they just want to understand the risks they’re taking on more fully, regardless of whether it's savings or life decisions.

Kate Capocci 23:06

I would say, and probably Rebecca will remember this as well, but anecdotally in our investment management exams, there’s a section on risk, and they said, ‘women tend to take less risk.’ They didn't have any stats alongside it, they just said that as a fact in our educational textbooks, ‘women tend to take less risk’, and you think, ‘so what?’, even if that is a trend, that doesn't mean that you shouldn't treat every single person coming through the door as the individual they are, with their own risk tolerance. It means nothing, but that just reminded me of that point.

Rebecca Davidson 23:44

Many thanks Deborah and Kate for your comments. It's very clear it's a broad and complex topic. So please, if you have any further queries on the topics raised today, refer to the Tilney website for more information. We will be back again soon with a new episode. If you have any feedback questions or comments, please send us an email at Thanks for listening.


  1. Sustainability Assessments for Companies Funds and Asset Managers, Morningstar, May 2021
  2. The Changing Faces of Women’s Wealth Report, Wealthiher, January 2021
  3. Pensions the Real Gender Gap, The Times, July 2017
  4. Alpha Female 2020: it may take almost 200 years to reach gender parity in fund management, Citywire, September 2020

More information

The sustainable and ethical investing area of our website has more information on the opportunities and challenges around the topic and how Tilney can help. And if you’d like to explore your sustainable investment options, remember we offer free initial consultations to help you get started.

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This article was previously published on Tilney prior to the launch of Evelyn Partners.