Sabin Wealth Management Group’s Environmental, Social and Governance (ESG) investing strategy provides an opportunity for investors to more closely align their investment objectives with their personal values and world views. A key component of our investment decision making process incorporates (ESG) analysis.
|Renewable energy, waste management, water use, and climate change|
|Human capital, community relations, labor standards, and diversity and inclusion|
|Accounting, board structure, executive compensation, business ethics, and fraud|
Pursuing both investment performance and a positive impact on the world used to exceed most investors’ abilities. But today, more companies and other issuers of financial securities are disclosing the information investors need to measure sustainability and impact. At the same time, advancements in technology – specifically in data analysis – have made it easier for investors to parse this information, and assess its impact on their investments and the impact of their investments on the world.
The timing of this change is important. Decisions about where and how to allocate effort and resources help shape the future. And perhaps now more than ever, we see the world changing substantially due to factors such as climate change, natural resource availability, and demographic shifts. Investors aware of these ESG issues are helping prepare their portfolios for the economy of the future.
With such a lens, investors can evaluate investments on a much broader range of criteria than they could in the past. As a result, they have the freedom to decide which factors are most important to them, articulate financial and ESG objectives, and understand where those objectives intersect.
Bruce, Andrew and Bradley Sabin have refreshed their multigenerational practice around the social values of their clients. Bradley Sabin, 31, is the youngest of the three and one of the first financial advisers in the U.S. to receive a CSRIC credential – for chartered socially responsible investing counselors.
The Sabins have started asking their clients about their values and offering relevant new investments or a realignment of existing portfolios. The response has been overwhelmingly positive, Bradley says. “We’ve just seen their eyes light up when they know that we are going to be thinking of a deeper dive,” he says. Common topics of discussion are climate change, tobacco and firearms.”
Millennials are often cited as the driving force behind sustainable investing, and the Sabins say their millennial clients are their most enthusiastic, as a group, for the firm’s new approach. But they say that their core group of clients in their 60s and 70s also have been eager to hear about it. “A lot of our older clients were very, very interested in this,” says Bruce Sabin.
Dieter Holger, The Wall Street Journal, Journal Reports: Wealth Management, “Financial Advisors Turn to ESG, Warily”
An investment’s social policy could cause it to forgo opportunities to gain exposure to certain industries, companies, sectors or regions of the economy which could cause it to underperform similar investments that do not operate under a social policy. Risks associated with investing in ESG-related strategies can also include a lack of consistency in approach and a lack of transparency in manager methodologies. A socially responsible investing style may shift in and out of favor.