Sustainable Investing (ESG)Submitted by LWM | Linden Wealth Management LLC on May 3rd, 2019
The field of sustainable investing is making great strides in offering investors ways to advocate for critical social and environmental issues while furthering their investment and retirement goals.
No longer do investors have to sacrifice investment returns in pursuit of what they think is the greater good making it possible to have an impact while being profitable.
Sustainable investing generally refers to any investment process that uses environmental, social, and governance (ESG) criteria to evaluate investments or to assess the societal impact of investments (Morningstar).
By the end of 2018, there were over 350 mutual and exchange-traded funds (ETF) available to U.S. investors. Nearly $20 trillion invested worldwide. Performance for many of these funds is in the top half of their categories.
Interest in ESG is expanding across all demographics but especially millennials and women. Greater than 80% want to devote some portion of their investments to ESG (Cerulli Associates).
|Climate and carbon emissions||Gender and diversity||Board composition|
|Air and water pollution||Human rights||Executive compensation|
|Energy efficiency||Labor standards||Audit committee|
|Waste management||Employee engagement||Bribery and corruption|
|Water scarcity||Customer satisfaction||Lobbying activities|
|Biodiversity and deforestation||Community relations||Political contributions|
Fund investors now have a sufficient number of suitable sustainable fund options to choose from, enabling them to build broadly diversified portfolios. Greater than 60% of sustainable funds finished in the top half of their respective categories (Morningstar).
If you'd like to learn more or discuss an investment strategy that included sustainable and ESG investing, please contact me.
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