By Jenni Riley, FPQP™
We hear a lot of changing buzz words for investing in a way that supports mindful governance, and positive social and environmental practices.
Socially Responsible Investing (SRI) may also be labeled as social investment, sustainable investing, socially conscious, green, moral, or ethical investing.
Environmental, Social, Governance (ESG) investing shines the spotlight on how much effort a company puts into having a positive impact on its community, suppliers, vendors, product sourcing, customers, environment and, most importantly, its employees. ESG factors considered include environmental issues like sustainable resources and climate change, but also topics such as labor practices, data security, and product safety.
Impact investing looks for a specific company, organization, or community to help them create something positive for society. Impact investing targets a particular purpose, project, or program to make an impact. Many impact investments are privately managed and are not available or traded on a public exchange.
Many financial advisors have the capability to support their clients in identifying values they hold. Portfolios can then be designed by either negatively screening investments to exclude investments that fail to meet specified requirements, or by positively targeting holdings that uphold a client’s philosophical views. Once identified, ethical guidelines can be used to select equities, mutual funds, and other securities that align with those criteria. As the importance of value-based investing grows among investors, so do the investment options.
Sustainable investing strategies have grown in popularity with investors 107.4 percent annually since 2012. Much of this growth is being driven by women and younger investors, according to the Report on U.S. Sustainable, Responsible and Impact Investing Trends.
No matter the descriptive terms we use, at the heart of value-based investing is a desire to build a nest egg in a way that seeks a financial return while aligning with your moral compass.
Jenni Riley, FPQP™ is Director of Operations at HAZLETT WEALTH MANAGEMENT, LLC which is independent of Raymond James and is not a registered broker/dealer. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc. Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. All investing involves risk, including the possible loss of principal amount invested. Utilizing an ESG investment strategies may result in investment returns that may be lower or higher than if decisions were based solely on investment considerations. 675 Sun Valley Road Ketchum, Idaho, 208.726.0605 HazlettWealthManagement.com
