Socially conscious investors use three main criteria that fall under the acronym "ESG," when creating investment portfolios. ESG stands for Environmental, Social, and Governance.
Environmental criteria might measure a company’s conservation efforts, pollution, and water conservation.
Social factors may include worker health and safety, privacy and security, and community involvement.
Governance criteria may refer to shareholders’ rights, transparency, ethics, and fraud.
The US SIF Foundation's Report on US Sustainable and Impact Investing Trends identified $17.1 trillion in total assets under management at the end of 2019 using one or more sustainable investing strategies, a 42% increase from the $12.0 trillion identified two years prior.
The cost of investing and implementing ESG portfolios was not as economical as it is today. However there has been a huge expansion in the offering of funds that consider investment logic and ratings, and ESG costs have significantly lowered.
In the past, one may have had to sacrifice the risk-return trade-off when investing in ESG funds. Private Ocean’s models offer risk-adjusted returns at costs similar to traditional portfolios.
We take our role as fiduciaries seriously, while we want to offer our clients investment solutions with a strong ESG profile, it is also important that this is not done at the expense of a less solid investment portfolio. Thanks to innovations in technology and investment products, we offer ESG solutions that combine the best of both worlds: A cost-effective, sound and well-diversified ESG investment portfolio that captures market returns through ethical investing.
The latest ESG news and insights by Private Ocean's financial planning and investing experts.
In this episode, Investment Research Analyst, Zach Schlaht, discusses how the ESG space is evolving and how this may impact investors' portfolios. (Listen Time: 25:29)
In this webinar, Private Ocean and Dimensional Fund Advisors discuss what investors should think about when considering ESG investing and answer common some questions. (Watch time: 32:44)
ESG is now able to combine the best of both worlds by providing market-like returns while also reflecting the investor's personal values.