Sustainable, responsible impact (SRI) investing- a.k.a. green investing - has emerged in recent years as a criterion for requests for proposals (RFPs) to institutional money managers and retail investors alike. It seems as though even objective, return-driven foundations and trusts have discovered the value of screening for social, environmental and corporate governance transparency when it comes to finding investments that are more likely to deliver the results investors invest to get: relatively predictable performance (it is, after all, a market).
For others, SRI investing provides a way to support and encourage environmentally sustainable development, by investing in industries and sectors considered to be less harmful to the physical environment, and therefore more sustainable (because you can go back to the natural resource again and again without depleting or destroying it). Impact investing goes a step farther in actively targeting human needs in the world and directing financial resources in a specific and measurable way.
Why? What happened? Let’s see…Enron; WorldCom; the Great Recession, driven by the financial services industry. Supersites; undrinkable water; valuable land unsafe for development due to systematic pollution of soil and groundwater –all just to touch the tip of the iceberg of distrust and disaffection for advice.
But still, who cares? Turns out, my clients care. Five years ago, I created, produced and hosted “The Socially Responsible Investing Show” on a local AM radio station for 36 weeks. Every Saturday, I presented an hour-long show featuring a topic I considered to be of interest to socially conscious listeners, complete with live interviews. As I was fairly new to the subject, I got to explore what socially responsible investing might be. I brought discussions with guests to listeners on topics such as, “is investing in gold socially responsible?” or “how clean is the water in the Mississippi?” or “sustainable farming in the wine country”, complete with a live interview with an official of the Lodi Winegrape Association.
Eventually, I started asking my clients, one at a time, something like, “if you could choose to invest in something that would support a personal value, or to avoid something that went against a personal value, would you want me to help you do that?”
All of them, every one, immediately said yes. All of them had values of which they were aware, and I was able to help empower them to connect their personal values with investment opportunities. My clients and I are nothing unique, just regular folks making our way through life. I would guess your clients are much the same. Want to know if they care about socially responsible investing? Ask them.
The opinions expressed in this report are those of the author and not necessarily the same as those of JHS Capital Advisors or its research department. JHS Capital Advisors did not assist in the preparation of this report and makes no guarantees as to the accuracy or reliability of the sources. This information should not be construed as a research report, as it is not sufficient enough to be used as the primary basis of investment decisions. Clients should work with their financial advisor to develop investment strategies tailored to their own financial circumstances.
Michael Mullins is a registered representative at JHS Capital Advisors. He is passionate about sustainability principles and applications with investing choices. You can reach him at: www.Jhscapital.com/michaelmullins
