Sustainable, Responsible Impact Investing (SRI) is a complex landscape of opportunities to support companies that utilize strategies that promote environmental or social justice goals and demonstrate good corporate governance or ESG. We seek investment managers we feel have expertise in identifying businesses that operate in a responsible manner, and are also attractive investment opportunities.
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We can work with you to determine what parts of your portfolio are more effective as SRI investments. While SRI has been available for over thirty years, there remain limitations on effectively implementing the strategy across asset classes. As with all of our clients, effectively communicating the strategy behind your investment portfolio is imperative to your success and our ability to build a long-lasting relationship with you.
SRI stands for Sustainable, Responsible, Impact Investing and it's an investment strategy that makes a conscious effort to consider how corporations are having either a positive or negative impact on people, communities and our natural environment.
ESG stands for Environmental, Social and Governance and is a methodology that embraces sustainability factors as a means of helping to identify companies with superior business models and/or business models that may have less risk because of their practices.
An ever-growing body of research suggests a strong association between responsible business management and positive financial performance. For example, Morningstar research found that the distribution of star ratings among sustainable investing funds skews in a positive direction, suggesting better risk-adjusted performance than their peers.
Researchers at the University of Oxford analyzed 200 studies, reports, and articles on sustainability. Based on their research, they found that on a firm level:
Lastly, a Morgan Stanley study of US-domiciled mutual funds and Separately Managed Accounts (SMAs) concluded that sustainable investments usually met and often exceeded the performance of comparable traditional investments, both on an absolute and also risk-adjusted basis.
While it’s been widely believed that millennials and women have a certain reputation for being most interested in investments that also do good for the world, a recent survey found that overall 72 percent of the United States population expressed at least a moderate interest in sustainable investing. According to the US SIF Foundation, as of year-end 2017, more than one out of every four dollars under professional management was invested according to SRI strategies.
As of November 2018, 78% of the companies in the S & P 500 index have corporate sustainability policies or issue corporate sustainability reports. This is a huge change from the 1990s when these reports started to be issued. Shareholder advocacy and engagement, resolutions and proxy voting, all can lead to constructive dialogue with a company to improve its ESG practices.
