ESG: Investing in Your Values
Investing with Your Values
ESG investing is a type of socially responsible investing that measures an investment’s financial return with the goal of aligning that strategy with a focus on personal values and ideologies. This type of investing considers several non-financial factors and the impact on your local community or the world at large. Examples of ESG factors include climate change, human rights, and company organizational structure. ESG investing offers the opportunity to evaluate investments among three main factors: environmental, social and governance.
- Environmental – This factor measures investments with a focus on the conservation of nature and the world around us. Examples include renewable energy, carbon emissions, natural resource usage, and recycling practices to evaluate a company’s impact on their carbon footprint and contributions to climate change.
- Social – Social factors focus on the community and human rights investments. Some considerations include how is the company conducting business ethically? What’s its track record in terms of equal hiring, diversity, and other social considerations?
- Governance – Corporate governance investments pertain to overall company structure and leadership, including compensation, diversity, and potential conflicts of interest for executive management and their board of directors. Company transparency can be a component to include insight into board and executive incentives and how they are tied to company’s overall success.
There is a lot to consider when it comes to ESG investing. We work with our clients to help them understand what ESG issues are important to them and align their investments with your personal values. If you’d like to learn more about how we can help you achieve your investment goals contact an Advisor today to learn more.