By now most of us have heard the terms “socially conscious investing” or “socially responsible investing” in the financial press. This concept is borne out of the idea that we can make investment choices that are not only profitable, but also made in sustainable businesses worldwide. Barron’s defines the movement as “impact investing” – aligning a family’s portfolio with interests and core values in an effort to make the world a better place.
About ten years ago the investment industry brought forth socially responsible investing or SRI. These fund choices would avoid investments in alcohol, tobacco, etc. Fast forward to 2018 and the industry has broadened the scope to include areas that consider their environmental, social, and governance (ESG) related factors and their impacts before making investments in a particular company or industry. So, while SRI is still around, these investments further take into account workplace policies, product safety, treatment of workers and a company’s social impact on its community.
This issue may not be relevant for every client at CJM (whether due to portfolio size and/or the client’s philosophical beliefs) but an allocation of some of the portfolio to this sector may be appropriate for larger portfolios and/or families that wish to leave a legacy beyond an inheritance for their beneficiaries.
If you would like more information on ESG holding(s) options that may be suitable for your portfolios, please give us a call to set up a time to discuss with your planner