Investing for Impact
You and your family have unique financial goals. Often, those goals are based on individual and family values. You may be passionate about making a difference in the world and because of that, seek to put your money to work in a manner that will make a meaningful difference.
You are a responsible investor, and responsible investors seek to reach their own financial goals while directing your investible dollars to a more healthy and sustainable world. It is our job to put your money to work in a manner that is more closely aligned with your personal values and priorities.
Through our values-based investing models, we strive to help you make a meaningful difference by consciously directing investment capital toward cases that are important to you, whether it be the environmental, social or ecological.
Values-based investing falls under several different categories and practices, including:
- Environmental, social and governance (ESG)
- Sustainable, responsible and impact (SRI)
- Socially conscious investing
Environmental, Social and Governance Investing
With this approach, investors search out companies based on desired environmental, social and governance characteristics. There are hundreds of ESG issues that can be considered when evaluating potential investments.
Sustainable, Responsible and Impact Investing
With this approach, an investor’s goal is to create a positive impact on environmental or social issues in addition to a positive financial return. Examples of this include clean water, climate change and education.
This approach continues to grow. The total US-domiciled assets under management using sustainable investing strategies grew from $12 trillion in 2018 to $17.1 trillion in 2020, an increase of 42% in the last two years.1
Socially Conscious Investing
Using positive and negative screening aligns the investments with an investor’s beliefs.
We believe companies who engage in good business practices are more likely to be successful than those who do not, but not every good company is a good investment. To begin the process of deciding where your dollars can make the most impact, we’ve developed an approach that takes into consideration your values. As your fiduciary, we never lose sight of the fact that it’s your money and it’s our job to help you manage it.
If you are interested in implementing such an approach, there are two primary investment objectives beyond the traditional goals of maximizing return and minimizing risk to help you make strategic decisions:
- Do No Harm – Avoid investments in companies that take a stance or profit from activities that conflict with your values. These are “negative” screens of companies or industries to be avoided such as tobacco, gambling, oil and gas, defense, etc. Obviously, one person’s idea of socially responsible investments can be completely different from another person’s.
The key is to differentiate between all of the available fund options and select those which most accurately reflect your values. Socialfunds.com and the Forum for Sustainable & Responsible Investment are good places to start. For those with a faith-based or religious perspective, the Christian Investment Forum can be helpful.
2. Do Good – Actively seek out investments in companies that create real value for their customers, communities and society at large. This approach often utilizes the aforementioned ESG factors as positive screening criteria.
Because each client has their own unique set of values, we’ve developed a series of model portfolios from a values-based perspective. In other words, we’ve already developed an outline from which to begin, taking into consideration broad-based risk tolerances and asset classes in which values-based strategies are available. From here, we can begin to fine-tune a portfolio that fits an individual’s needs.
We have identified and approved many different strategies that offer a values-based approach. These include both active and passive strategies. Further, we have developed a values matrix that we use to match against your individual values. Using this strategy, we can work with you to determine and implement strategies that best fit your goals. The broad range of values-based investment opportunities provides opportunities to develop a diverse, well-balanced portfolio.
Want more on this topic? Check out our Socially Conscious Investing article.
1US SIF Trends Report Highlights, ussif.org.
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