Let’s Talk… ESG Investing!

You can have the greatest company in the world, but if no one will buy its stock, it won’t go up. You’ll hear things like: “this stock is a really deep value”. Much of the time, however, the case is that there is a trend toward ESG (environmental, social, corporate governance) investing and certain stocks will never be ESG friendly. Some people want their money to go to companies that earn profits in a responsible way, and relatively speaking some industries are off limits. 

Today we are seeing new ESG ETFs enter the market. I’m not telling you to buy or not to buy because that depends on your risk tolerance and investment objective, but this showcases the trend that investors are demanding an easy way to invest in ESGs with professional management that is diversified. In this case, it’s a portfolio of stocks that have been screened by the manager for having a good ESG score. 

In the end, the older I get, the more I realize that I really don’t want to wake up and see a company that I own in the news for some environmental disaster (remember BP and Exxon) or accounting scandal (WorldCom, Enron come to mind). An ETF strategy may be a way to ESG invest for a portion of your money.

Socially Responsible Investing (SRI) / Environmental Social Governance (ESG) investing has certain risks based on the fact that the criteria excludes securities of certain issuers for non-financial reasons and, therefore, investors may forgo some market opportunities and the universe of investments available will be smaller.

The opinions voiced in this material are for general information only and not intended to provide specific advice or recommendations for any individual.

The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities.