Zenith features Kearney Group’s new Ethos Managed Portfolios.

Author Annie Lillico Lewis

Expert Reviewer Paul Kearney, CPA, CFP®

Kearney Group founder and CEO, Paul Kearney, talks about responsible investments and teaming up with Zenith on ESG-first portfolios.

In Zenith’s latest Insights publication, Paul reflects on Kearney Group’s Ethos Managed Portfolios, responsible investments and the two organisations’ recent partnership.

The primary goal of the Ethos suite, Paul says, was “to create a portfolio that was a high-performer because of its do-gooder-ness, not in spite of it.”

He also gives special attention to the firm’s Responsible Investment Classification Model, which includes a “scoring system [designed to] advance both the breadth and depth of ESG integration across the Ethos suite.”

The Model ranks and identifies areas in which we can:

1. increase the number of Ethos funds that are invested under a responsible investment regime (quantity / breadth of ESG integration); and
2. gradually take up more regenerative (not just sustainable) forms of investing (quality / depth of ESG integration). For example, where two funds are considered otherwise equal, we prioritise the fund with the most aggressive ESG profile.

Much needed to improve the ESG sector.

While pleased with Ethos’ development thus far, Paul stresses that “there is still much to do”. This viewpoint also echos throughout his recent ESG Q&A.

In closing, Paul urges fund managers and ratings houses to quickly improve transparency. High-quality data and reporting, global standards and benchmarks will transform the budding responsible investments and ESG sector.

He also urges fellow Financial Advisers to carefully examine “the underlying policies and commitments made by funds (including demanding of them, full disclosures of portfolio holdings, at least in line with our OECD peers).”

Financial Advisers must “seize the opportunity to progress this conversation,” Paul says. We have the power “to demand more and to affect change by voting with our feet and our dollars.”

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