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Home    Investing ideas    Sustainable & ESG investing

Important information: The value of investments and the income from them, can go down as well as up, so you may get back less than you invest.

IF you are looking for companies to invest in, those who centre employee wellbeing are known to be more productive and consequently boost profits.

According to research by Oxford University’s Saïd Business School1, in collaboration with BT, happy workers are 13% more productive - making more calls per hour and converting more calls to sales.

Employee wellbeing sits under the social category of ESG (environmental, social and governance) and in the last five years it has exploded in popularity.

You may think ESG is a relatively new hot topic. But what if I told you the Victorians were ahead of the curve and were practicing sustainability back in the mid-1800s.

A fifteen-minute drive from my home in Bradford is Saltaire Village - a cobblestone picturesque World Heritage site with a prominent mill in the centre. Back in the mid-1800s, Sir Titus Salt - a wealthy manufacturer turned politician - built houses, bathhouses, churches and a hospital for his 3,500-strong work force as a means to combat regular cholera and typhoid outbreaks. He quickly realised that a healthy workforce equated to greater productivity and profits.

These days, companies are perfecting the art of sustainability by prioritising the happiness of their employees. Benefits range from private health care, to gym memberships, entertainment and shopping discounts.

The ‘nanny employer’ has also become more common, especially during the Covid-19 pandemic which prompted a serious and permanent shift.

Employee wellbeing suddenly became essential and companies responded with an emphasis on flexible working and mental health. 20 years ago, an employer offering help with your mental health may have felt intrusive but now it is welcomed with open arms.

Wages and bonuses also contribute to employee wellbeing. If a company offers an array of benefits, but did not pay well, it’s likely to affect staff turnover.

Companies are aware of the financial pressures on employees with inflation at a forty-year high. Household names, such as Jet2holidays, NatWest, Cadbury, Rolls Royce and Lloyds Bank, have recently increased their pay or even offered a one-off payment to support employees.

Source: Employee Benefits Pay strategy 12.07.22 - 16.06.22

In many ways, it feels strange that employee wellbeing falls under the banner of sustainability. After all, what we’re really talking about is running a business with a degree of common decency. Treat people well and you get the best out of them. It’s not rocket science.

Certainly, in a cost-of-living crisis, companies cannot afford to skimp on benefits or wages for the sake of cutting costs. It’s crucial to a company’s productivity levels, which in turn affects profits. You know what they say - happy employees equals a happy life.

If you are interested in sustainable investing, check out the Fidelity Sustainable Investment Finder which helps you find the right sustainable investment to suit your needs.

Important information: Investors should note that the views expressed may no longer be current and may have already been acted upon. The Investment Manager’s focus on securities of companies which maintain strong environmental, social and governance (“ESG”) credentials may result in a return that at times compares unfavourably to similar products without such focus. No representation nor warranty is made with respect to the fairness, accuracy or completeness of such credentials. The status of a security’s ESG credentials can change over time. Reference to specific securities should not be construed as a recommendation to buy or sell these securities and is included for the purposes of illustration only. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.

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Please remember that past performance is not necessarily a guide to future performance, the performance of investments is not guaranteed, and the value of your investments can go down as well as up, so you may get back less than you invest. When investments have particular tax features, these will depend on your personal circumstances and tax rules may change in the future. This website does not contain any personal recommendations for a particular course of action, service or product. You should regularly review your investment objectives and choices and, if you are unsure whether an investment is suitable for you, you should contact an authorised financial adviser. Before opening an account, please read the ‘Doing Business with Fidelity’ document which incorporates our client terms. Prior to investing into a fund, please read the relevant key information document which contains important information about the fund. This website is issued by Financial Administration Services Limited, which is authorised and regulated by the Financial Conduct Authority (FCA) (FCA Register number 122169) and registered in England and Wales under company number 1629709 whose registered address is Beech Gate, Millfield Lane, Lower Kingswood, Tadworth, Surrey, KT20 6RP.

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