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ESG Investing: Aligning Your Values With Your Investments

ESG Investing: Aligning Your Values With Your Investments

Apr 25, 2018 | Blog

A couple things that have guided my life is to serve others and “pay it forward”. Whether it is helping children with special needs through West Madison Little League, serving the community through Blackhawk Church, or being involved with Sustain Dane, it seems like there is always something on my plate. I wondered, “how can I take these principles and apply them to my career?”.

Sustainable investing

When it came to my day-to-day work, sustainable investing was something that I could incorporate into my business that encourages progress in the form of investments. Sustainable investing has been something I have been passionate about and have brought to clients ever since I have been in the financial planning industry. The investing world typically uses three overarching variables that fit into sustainable investing: 1) Environmental 2) Social and 3) Governance, or ESG for short. I realized that not only can I help people with their financial goals, but I can do it in a way that helps them align their investments with their values.

Incorporating your values into your investments

Many people love the idea of investing in a way that aligns with their values but do not know how. They (incorrectly) believe that if they want to retire they will have to make a deal with the devil and invest in whatever the stock market offers. Incorporating ESG into a portfolio helps one invest in companies that are taking their corporate social responsibility seriously. I started to educate my clients and the general public that they should start by identifying the things that they want (or don’t want) in their portfolio. One example could be clean energy organizations. Next, they need to start understanding what investments they currently own. Finally, I help them improve their portfolio so it is better aligned with their values.

Will I suffer financially by investing in a sustainable manner?

What about the numbers? The most common question people ask is “will I sacrifice returns?”. Assuming that the portfolio is well diversified you do not have to sacrifice returns. As a matter of fact, studies from Harvard, TIAA, and Barclays, to name a few, show that investing in ESG may outperform their benchmark in the long-term and that they offer better protection on the downside than a traditional investment portfolio. The market for ESG funds is growing exponentially. Depending on if you ask USSIF or McKinsey, estimates point somewhere between $10 – 20 trillion (with a T) are invested in ESG funds. That number is continuing to grow. Sustainable investing is here for the long run and will continue to transform where investors put their money in the future.

Thank you for reading; please reach out if this is a topic of interest!

Mitch DeWitt

Financial Advisor at Walkner Condon Financial Advisors

Walkner Condon Financial Advisors is a registered investment advisor with the SEC and the opinions expressed by Walkner Condon Financial Advisors and its advisors in this piece are their own. Registration with the SEC does not imply a certain level of skill or training. All statements and opinions expressed are based upon information considered reliable although it should not be relied upon as such. Any statements or opinions are subject to change without notice.

Information presented in this piece is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed.

Information in this piece does not take into account your specific situation or objectives and is not intended as recommendations appropriate for any individual. Readers are encouraged to seek advice from a qualified tax, legal, or investment adviser to determine whether any information presented may be suitable for their specific situation. Past performance is not indicative of future performance.