Once upon a time, many investors believed you had to trade returns for environmental responsibility. Today, environmental impact is just one more risk that professional portfolio managers take into consideration when evaluating potential investments. Turns out it can be a sign of a good business!
Evolution of RI Investment
Responsible investing has changed. It isn't just about values anymore. It's about managing risk to long-term stakeholder value. In a world where climate change, water scarcity and global supply chain issues dominate the business pages, that job has become a lot more challenging.
Responsible investors have long believed that integrating ESG factors into the selection and management of investments can provide superior risk-adjusted returns and positive societal impact. What’s changed in the past decade is that it’s becoming a mainstream function of good investment practice, resulting in better, more informed investment decisions.
There’s a growing consensus among investors that accurate valuations and proper risk management require greater disclosure and consideration of ESG issues (e.g., climate change, human rights, labour relations, consumer protection, health and safety and aboriginal relations).
As a result, RI has evolved from just screening out companies that we don't like to integrating environmental, social and governance or ESG criteria into the selection and management of investments.
There are several investment solutions that embody this approach. Here is one of them...
For more information, speak to a Four Points Financial Solutions advisor by calling 1.866.235.0004 today.