Sustainable Investing 101

Today on the Thrive For[e]ward podcast we going to bring it back something that is near and dear to my heart and that is Sustainable Investing. Get ready because we are going to focus ALL month on this topic!

 

How many of you can look at your 401K or investments and know exactly what companies you are invested in?

Most people can’t do this. It’s extremely challenging to the end user to understand this. AND if you are invested in mutual funds, it’s even more difficult. I’m including an awesome resource below that will help you begin this exploration. 

 

Sometimes we blindly look at what our investments are and trust our advisor or mutual fund company or purely look at return vs what is it we are growing in. We do this rather than addressing the question of … what are we funding? 

 

Throughout 2021 and even prior, we have been having conversations about social impact and how we can continue make changes that are necessary within our communities. We are seeing that sustainable investing has positively changed companies through the practice of shareholder engagement. It holds companies responsible as they recognize how people are choosing to invest their money. 

 

If you are not familiar you might be asking yourself … what is ESG or Sustainable Investing? 

 

ESG stands for Environmental, Social, and Governance. ESG investing uses particular criteria to grade investments in an attempt to clarify exactly what sustainable should look like.

 

ESG looks areas/topics such as:  

  • Board and Executive Diversity

  • Pay equity 

  • Climate change

  • Diversity in leadership 

  • Gender equity

  • Affordable and clean energy 

  • Industry, innovation and infrastructure 

  • Proxy voting 

 

>> According to the US SIF Foundation’s 2020 trends report, U.S. assets under management using ESG strategies grew to $17.1 trillion at the beginning of 2020. That’s a 42% increase from $12 trillion at the beginning of 2018.

 

Remember just because you invest in sustainable investing doesn’t mean you are changing the world. This is just one piece of the bigger picture. We are living in a polarized world so we constantly have to question ourselves and focus on what we can do to come together for change. Sustainable investing is just one way to create impact, it’s not all the only way. As with any investment strategy, there are still risks, and you need to make sure it’s the right strategy for you.

We continue to have questions when looking at this area and idea of investing. If YOU are curious, I invite you to join us in this conversation. 

 

As I mentioned before, and you’ll hear on the podcast, it is a complex process to dig deep and find if companies are aligned then way you would desire. Here is one of the resources we like to utilize at Forethought to help clients start their own journey of exploration: 

https://www.asyousow.org/invest-your-values/

 

As You Sow, is a website and organization that allows you to look for funds that do not invest in certain issues for example fossil fuels, gun free, and gender equity. You can choose the cause you are passionate about and enter the “ticker” symbol assigned to your investments and look up their rating and they why behind this. 

 

If you think this feels like a lot to execute on and would rather leave the research to a professional team, we are here for you! We at Forethought Planning look at the strategies that the companies you invest in focus on. We believe in looking beyond just what your profit is to ensure that your investments align with your values and what you are passionate about.  

Feel free to schedule an appointment to our complimentary 30 min Wealth Assessment session to learn more about how we incorporate these strategies and other’s to assist you through the financial planning process. 

 

 

 

Securities offered through LPL Financial, a member of FINRA/SIPC. Advisory services offered through Advisors’ Pride, a SEC registered investment advisor. LPL Financial, Advisors’ Pride, Forethought Planning and the guests of Thrive For[e]ward podcast are separate and unaffiliated parties. Any of the parties listed above are not affiliated with Forethought Planning, Advisor’s Pride, or LPL Financial. The views expressed here are those of the participants, and not those of Forethought Planning, Advisor’s Pride, or LPL financial. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. LPL Financial and Forethought Planning do not offer legal services.

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