Many of our clients are interested in driving positive change in the world by investing in progressive companies and strategies while also generating attractive financial returns. That’s why we created our forward-looking Environmental, Social, and Governance (ESG) portfolio.
With ESG investing, we pay close attention to factors like sustainability, corporate transparency, equity, environmental impact, diversity, and inclusion. Where many firms simply exclude companies that violate these principles, we go further. We seek out opportunities for you to participate in high-impact, fast-growing segments of the world economy.
Here’s more of what you can expect from ESG.
As the world changes at warp speed, applying ESG principles may help you protect against new and future investment risks. It may also help you identify emerging economic trends and enhance long-term returns.
A company that looks attractive using traditional analysis may look riskier when viewed through our ESG lens. For example, if a potential investment has an outsized environmental footprint, or substandard privacy protections. These new factors can reduce their value in the eyes of the public, and in an investor’s portfolio.
Socially conscious investing has been around for decades but it has grown rapidly in recent years. In 2021, global ESG investing accounted for $35+ trillion in assets under management, over a third of the world’s professionally managed assets. Additionally, 80% of institutional investors said an increased allocation to climate-thematic funds will be highly important in the coming years.1 A new age of responsible investing is here.
ESG may provide the best of both worlds. 35% of investment professionals invest in ESG to improve their financial returns.2 A full 77% say they believe ESG factors play a role in a company’s broader financial performance.3 Strategic ESG investing allows you to invest in your personal values. It also plugs you into exciting economic opportunities around the world.
Our Westmount ESG managers align with the United Nations Sustainable Development Goals, a global framework adopted by the U.N. General Assembly. The U.N.’s objective is to guide investment that addresses humanity’s most pressing issues — poverty, inequality, climate change, environmental degradation, peace, and justice. By making ESG-oriented investments, you can be a vital contributor to this initiative.
With ESG, financial performance is only part of the equation. As a socially conscious investor, you also want to know about the real-world impact your investments are making. Every quarter, we recap the most inspiring stories from across the portfolio. You can see the latest update here.
1 Research Report: Environmental, Social, and Governance, State Street Global Advisors, November 2021
2 The Truth Behind 5 ESG Myths, MSCI, December 2020
3 Performing for the Future, ESG Institutional Investor Survey, State Street Global Advisors, April 2018