When it comes to measuring the “impact” of ESG investing you must first identify which type of “impact” you are referring to.
- Impact on the investor portfolio. Click here to view our article and learn more about how careful research can be used to integrate an ESG investment strategy into a well-diversified portfolio.
- Impact of the invested companies on the world. Investors who include ESG funds in their portfolio almost always want to know that the companies they are investing in are making a positive impact on the world. This is also referred to as “impact-generating investing” and it is very difficult to measure. Given that impact-generating investing is currently so challenging to quantify it is important for investors to set realistic goals for their ESG investment strategy.
We think that a more practical approach is one that is “impact-aligned”. This can be achieved by using academic research to select funds that align investments with your personal values in a meaningful and impactful way.
Click here for more information from our partners at Dimensional Fund Advisors about how ESG funds can be effective at aligning investors’ portfolios with their values despite the fact that real-world impact is hard to quantify.
If you are considering an impact-aligned approach to your portfolio here are a few things to keep in mind:
- Educate yourself: Learn about different impact investment opportunities, such as renewable energy, sustainable agriculture, or affordable housing.
- Research: Identify companies, funds, or projects that align with your impact goals and have a track record of generating positive change.
- Stay committed: Impact investing often requires a long-term perspective, so be patient and persistent in pursuing positive change alongside financial returns.
The ultimate goal of sustainable investing is to deliver both financial and purposeful-driven outcomes. At Copper Leaf Financial we help our clients develop a sustainable, impact-aligned portfolio. Our investments integrate ESG and sustainability metrics into choosing funds that are aligned with your most deeply held values. The series of Sustainability Portfolios we offer have been through a rigorous screening process by our investment managers to ensure that you are investing in a broad array of U.S. and international, publicly-traded corporations – ones committed to a greener, environmentally sustainable future. Click here to learn more about Copper Leaf’s sustainable planning and investment services or reach out to us at 802.878.2731 to schedule a complimentary introduction meeting.