Hi everyone and thanks for joining me. Today I’ll be discussing Socially Responsible Investing.  Now, many of you may not know what that term means so part of today’s discussion is to give you a definition of what that means.  Then we’ll get into these areas you can invest in and what incorporating it into your financial strategy. As you all know, it is part of our process: The Insight FORMula, to discuss timely topics like these. As you can imaging with this year’s pandemic, investing in sustainability for our communities and our planet has become a big talking point.  For example, for the first time in 134 years, the U.S. is now using more energy from renewables than coal.[i]  In this year’s pullback, some responsible investing funds even outperformed other traditional, similar style funds.[ii]

Whether you incorporate this approach into your financial strategy or not, we think it’s important to know that choices are available.  So, what does it mean to invest responsibly?  Responsible investing can be categorized as follows:

·         ESG Investing (Environmental, Social, Governance)

o   These three central factors determine the viability of the societal impact of a particular investment.

·         Impact Investing

o   These investments seek to combine a societal benefit with a potential financial return.

·         Socially Responsible Investing

o   Here you can think of “green” investment focuses like solar, wind, clean water and so forth.

·         Philanthropy

o   These target longer term, measurable impact on a particular cause or group that you’re looking to help.

If we just look at ESG for example, here are a few categories that fall within that:

·         Environmental: Energy and Efficiency, Air and Water Pollution, Climate Change

·         Social: Data protection & Privacy, Customer protection, Community Relations

·         Governance: lobbying, accounting, political contributions

Now that you have an idea of the different categories, let’s look at some of the more popular interests amongst investors: (notes for graph)

Obviously these areas are not totally inclusive and in fact, the number of areas you can focus on has grown tremendously. One final point I want to make on this is that the trend of doing good for our society while simultaneously doing good business, is a growing trend.  Many CEOs and companies today are largely focused on this, as well as their employees, communities and investors.  As more people want to associate (and invest) in companies that have a positive impact on our planet and communities, it will surely make our world a better place.

As you know, each financial strategy is unique and there are several ways to incorporate responsible investing into your plan.  For more details, please reach out to us to schedule an appointment. 

That’s’ all for this edition of our CG Education Series, see you next time!



[i] Source: Wells Fargo Investment Institute

[ii] Source: Morningstar