Understanding ESG Investing- Takeaways

By Andrea Young on July 21, 2022

Although ESG Investing has been around since the 60s, it has become more popular in recent years, with investors paying close attention to how corporations impact and respond to environmental and (or) social issues. We were fortunate to have Kirsten Meder, CAIA, CMT, and ESG/SRI Investment Strategist at Aperio, host our July event. Kirsten discussed where we’ve come from with ESG and impact investing, where we are now, and what the opportunities are for the future

What is ESG?

ESG stands for environmental, social and corporate governance. This means that investors may choose to put their money into companies that create positive social and environmental impacts. 

Investors may focus on companies that leave a smaller carbon footprint or take a stand on a particular social cause. For example, if you want to support companies that provide clean energy, you can work with your advisor to make sure your investments don’t include companies in the oil and fossil fuel industries. 

Where should you start?

When considering ESG investing, start by making a list of what is important to you and what you value most with regard to ESG. Is environmental impact a priority to you? Or maybe you want to invest in companies that support human rights initiatives. 

Once you’ve determined what you value most, you’ll want to do your due diligence. Be sure to look at companies through different lenses. On the Surface, a company may check off all of the boxes for social or environmental responsibility, but it might not have a good work culture. Do they have a high turnover rate because of an unhealthy work environment? Do they lack diversity when it comes to the boardroom or employee pool? These are details to research when looking at possible investment opportunities. But as always, speak to your financial advisor to help guide you through your decision-making.

Research Tools

asyousow.org- Is a shareholder advocacy website focusing on gender inequalities, workplace equity, environmental health, and more.

Company Websites- In some instances, companies are very transparent about their ESG policies and interests, and you can learn about them just by searching their websites. 

Reach out to the company- If there’s a company you‘d like to learn more about, reach out directly. Many companies are now implementing cultural and/or sustainability departments.