Rise of the conscious investor
As consumer conscience grows, some traditional investment funds, such as pensions, have come under scrutiny regarding their holdings in certain sectors, such as oil and gas companies. Responsible and ethical investing were typically perceived to be a niche market, but this is no longer the case. In fact the market in the UK for socially responsible investing is predicted to increase by 173%, reaching £48bn by 2027.
Investors’ desire for ethical investing is not limited to traditional investments either. It applies to the growing alternative asset classes market, which includes the likes of whisky, fine wine and luxury goods.
While some investors may have concerns about supporting alcohol brands due to health concerns and the social impact of over consumption, there has been a significant shift in the industry to promote responsible consumption and to positively contribute to communities through education initiatives. Ultimately, investors need to weigh up any cons with the pros.
The whisky industry’s response
As a major manufacturer and contributor to the UK economy, the whisky sector has a duty to tackle the climate crisis across all areas where production and distribution have an impact. With the launch of its ‘Sustainability Strategy’, the Scotch Whisky Association has committed to reaching net zero by 2040, a full decade earlier than the UK as a whole.
As a whisky cask investment firm, we work with distilleries such as Bruichladdich, Bunnahabhain and Deanston, who are implementing several sustainable practices. Bruichladdich Distillery recently announced its aim to decarbonise all distilling operations by 2025. As one of the largest private employers on the Isle of Islay, the distillery supports and promotes the local community.
Similarly, Bunnahabain Distillery is also on track to become one of the first distilleries on the Isle of Islay to have a net-zero emission distillation process. This is following the installation of a biomass energy centre to support the island’s forests and economy with a locally sourced fuelling system.
Known for its organic whisky, Deanston Distillery was the first hydroelectric, self-sufficient distillery in Scotland. It received a gold certification from the Green Tourism accreditation body for its sustainability practices.
By implementing green credentials in their distilling operations, product packaging and shipments, and even in tourism, the Scotch whisky industry is giving back to its local and regional and communities too. And, while the whisky cask investment market is a relatively new, albeit growing industry, these ESG initiatives only make it a more attractive alternative investment opportunity.
Balancing principles with profitability
The market for whisky cask investments has seen dramatic growth in recent years. With 14.95% growth in 2022, global whisky sales are on track to reach £99.48 billion by 2028. These ethical and sustainable investments are becoming increasingly popular and an attractive choice for ethically conscious investors.
Prioritising ethics doesn’t mean compromising on financial returns. In fact, ethical investments are relatively resilient when compared to traditional investments that are impacted by industry uncertainty and geo-economical events. Historically, socially responsible investments have demonstrated a remarkable capacity to weather market fluctuations. Indeed, as reported by Morgan Stanley, ethical investments outperformed traditional funds in the first half of 2023.
By shifting to a more ethical and responsible investment portfolio strategy, investors can help make a meaningful social and environmental impact, whilst also reaping the financial returns of an investment.
To find out more about our sustainability practices, or how we work with clients to help them make the investment that’s right for them, get in touch with one of our portfolio managers.
**Disclaimer**
Whisky cask investments are unregulated in the UK. The value of investments is variable and can go down as well as up. You have 14 days to change your mind and request a full refund under our cooling-off period. The volume of spirit will decrease over time (known as “the Angels’ share”). “New Make” spirit has to be matured for 3 years, during which time its alcoholic strength could be reduced. However, for the product to be classed as “whisky”, it must retain a minimum strength of 40%.
Fees apply, see terms and conditions for details and terms around exiting your investment. An investor may get back less than the amount invested. Information on past performance, where given, is not necessarily a guide to future performance. The capital invested can fluctuate and the price of casks can go down as well as up and is not guaranteed. The investments and services offered by us may not be suitable for all investors. If you have any doubts as to the merits of an investment, you should seek advice from an independent financial advisor. The Whisky 1901 Ltd sale price includes a discretionary markup to cover the cost of services provided, including but not limited to, storage, movement and maintenance of casks, insurance, front and back-office software.
