Four Reasons to Consider ESG Investing
Erica Stephenson - Aug 19, 2021
Responsible Investing (RI) is quickly growing to become a standard. With accelerating commitments by policymakers and business leaders to address environmental, social and governance (ESG) issues, RI has gained a greater focus in the investing world.
Responsible Investing (RI) is quickly growing to become a standard. With accelerating commitments by policymakers and business leaders to address environmental, social and governance (ESG) issues, RI has gained a greater focus in the investing world. Increasingly, investors are prioritizing ESG factors into their investment objectives.
Have you integrated ESG factors into your own investing? Here are four considerations:
1. There are a wealth of investment options. Until recently, we used a process of negative screening for RI, which involved avoiding investments that didn't meet ESG standards. With greater attention to ESG issues, this has let to other approaches to investing in this space.
2. RI can support and enhance performance. For years, there was a long view that investors who prioritized ESG factors sacrifices greater returns. However newer studies suggest the reverse often holds true - companies integrating these practices into their operations have the potential for improved investment results over the longer term. Why? One reason is because focusing on ESG factors can provide broader view of potential risks and opportunities.
3. Investors can make a positive impact. The choices that investors make can send a message to business owners. With new commitments by global policymakers and business leaders, there has been increased transparency which has led to improved reporting and accountability by businesses and leaders.
4. Responsible investing is the future. There has been a distinct pivot by governments, and leaders in actively supporting and financing environmental and social movements. This past spring, the U.S. committed to cutting greenhouse gax=s emissions by around 50 percent by 2030. Similarly, Canada has pledged a significant cut and even China, seen as a global offender, has stated its commitment to "protect the environment and deliver social equity and justice in the course of green transition".
How We Can Assist. For many investors, investing is more than just meeting a consistent return. It also involves incorporating personal values to make a positive impact in the world. We can help you structure your portfolio to integrate ESG factors that are important to you. Please call for a discussion.