What Do You Want from Your Investments?
A look into “ESG” Investing:
as anyone ever asked you what you want from your investments aside from a given return? It might seem like an odd question but it’s worth exploring. Over the years, many people have approached us about wanting to “feel good” about their investment portfolio. Of course, this can mean something different to everyone. But one theme we are seeing more and more is the desire to invest in companies that are focusing on sustainability and various forms of social responsibility.
Examples of this approach can include: investing in companies that are actively working to reduce their carbon footprint, businesses that are highly ranked for their customer service, treatment of their employees, or their product safety. While these examples may seem quite different from one another, they are all examples of companies that are working towards achieving some kind of good citizenship.
This socially conscious style of investing is referred to as Environmental, Social and Governance Investing, or ESG. Instead of taking an exclusive approach to your portfolio and removing specific companies that do not align with your values, ESG takes a more inclusive approach to investing and identifies companies that are having a positive impact on their business, the community or the environment. It is an approach that focuses on business fundamentals and quality.
It is also believed that adhering to ESG principles assists in managing risk and company vulnerability. It is through this additional layer of due-diligence that portfolio managers might identify strengths and weaknesses.
If you watched our video on ESG investing, you’ll remember that we stated how research is indicating that companies focusing on how their business practices today are affecting trends in the future, it is believed that this is how companies are supporting their own longevity, job creation and long-term stewardship of profitability.
So, the next time someone asks you what you want from your investments, consider taking your time to think about if sustainable investing is one of those ideas that come to mind. We understand that every investor’s values and goals are different. And with that in mind, we are here to support you if ESG investing is something that you would like to explore.