Investing With Your Conscience

Monday Apr 4th, 2022

The first Earth Day was held on April 22nd, 1970, inspired by Senator Gaylord Nelson from Wisconsin who was concerned about the deteriorating environment. 40 years later, over 1 billion people and 190 countries come together to engage in actions that can help our blue planet. We love Earth Day and everything it stands for, but we wonder what would happen if we treated every day like Earth Day?

What if we made good decisions every day to take care of planet earth? This is why we believe in sustainable investing and the difference it can make. If you are interested in putting your money in investments that support societal change, then let’s talk. Our team of professionals has decades of experience analyzing clients’ needs and goals and helping map out a plan to help them pursue the financial success they desire. Let’s examine how people have been using sustainable investing as part of their financial portfolios.

Four questions you should consider before investing in ESG funds:

What is sustainable investing?
Sustainable investing considers environmental, social, and corporate governance (ESG) criteria to create financial returns and a positive societal impact. Many clients are attracted to sustainable investing because they care about building a better world — in addition to building wealth. ESG investing is a natural fit for individuals who care deeply about certain causes and feel a calling to align their portfolios with their values.

How large is the sustainable investing marketplace?
According to the US SIF Foundation’s 2020 report, in 2020, 1-in-3 dollars under professional management in the U.S. (around $17.1 trillion) was employed in a sustainable investing strategy which is a 42% increase from 2018. People across the country truly want financial solutions for sustainable change.

Sustainable Investing

In addition, ever-evolving regulations are forcing companies to disclose more information about their sustainability practices which will provide more data and more opportunities for ESG investing in the future.

Who are sustainable investors?
Anyone can be a sustainable investor. Typically, sustainable investors include average investors to high-net-worth individuals and family offices, as well as organizations and institutions that are seeking strong financial performance along with the ability to invest with their conscience.

How do sustainable investment funds perform?
According to the US SIF Foundation, several studies have found that investors do not have to pay more to align their portfolios with their values. The Morgan Stanley Institute for Sustainable Investing released a study conducted during the coronavirus pandemic in 2020 that found that funds focused on “environmental, social and governance (ESG) factors, across both stocks and bonds, weathered the year better than non-ESG portfolios.”

This study also found that in 2020:
U.S. sustainable equity funds outperformed their traditional peer funds by a median total return of 4.3 percentage points.
U.S. sustainable bond funds outperformed their traditional peer funds by a median total return of 0.9 percentage points.
U.S. sustainable equity funds’ median downside deviation was 3.1 percentage points less than traditional peer funds.
U.S. sustainable taxable bond funds’ median downside deviation was 0.4 percentage points less than traditional peer funds.

2020 Median Returns

Morningstar’s 2021 Sustainable Funds US Landscape Report, agreed that “sustainable funds comfortably outperformed their peers in 2020, especially equity funds.”

In the U.S., about half of individual investors have adopted sustainable investing to use their money to support causes that are near and dear to their hearts. If you are considering ESG investing, we offer the financial strategies you need, and the support you deserve. Don’t hesitate to schedule a consultation and let us know how we can build you a financial plan that coincides with your beliefs.

591 West Hamilton Avenue
Suite 201
Campbell, CA 95008

Phone: 408-871-5900

Fax: 408-871-5905

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