Industry Updates

Nutmeg makes own ESG move with screened ETF portfolios

Scott Longley

Nutmeg has moved the debate around ESG a further notch forwards after it announced that it had become the first UK-based wealth manager to provide environmental, social and governance (ESG) scores for its entire investment range.

At the same time the company has launched 10 new fully-managed globally diversified socially-responsible portfolios.

As of this week, all Nutmeg portfolios will show a range of ESG scores calculated using thousands of independent data points from MSCI.

Nutmeg's investment team will continuously score every portfolio to ensure customers understand the impact their investments are having and how well their portfolio aligns with their values.

"That means no matter what their investment choice, our clients able to see in real-time how their portfolio stacks up against a range of ESG criteria, including its carbon output and the percentage of companies with 30% or higher female board members," said James McManus, head of ETF research at the firm.

Shaun Port, chief investment officer, said the company hoped to also achieve cut through with the public by making it easier for investors to understand what ESG and sustainable measures were being used to rate their portfolios.

"Hard as we may try, no investment portfolio can be designed to dodge every controversy, but we're committed to improving choice in the investment world, being transparent about how sustainable our portfolios are and empowering investors to decide what's right for them," he said.

Nutmeg pointed out it is one of only a handful of UK wealth managers that have signed up to the Principles of Responsible Investment (PRI).

Port said Nutmeg was continuing to lead the wealth management industry on transparency. "From portfolio performance to costs and charges, which have always been easy to find on our website," he added. "We want to empower our customers' decision making and start a bigger conversation on sustainable investments by providing a new layer of transparency to our portfolios."

Nutmeg added it was challenging others within the UK wealth management sector to be more transparent with the consumer.

Said McManus: "We think this is a first in the wealth management industry, and that ESG reporting will become a necessary requirement for wealth managers & the fund management industry in general in the future."

ESG has been in the news recently. Last month, BlackRock iShares launched a suite of ESG-based funds. However, the suite came in for criticism from Mark Northway from Sparrow Capital who suggested that BlackRock was confusing matters with its naming policy.

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