New opportunities in environmental, social justice, and governance (ESG) investing can provide financial advisors and their clients the opportunity to address retirement planning needs while supporting businesses that are focused on innovation and sustainability.
Looking to Do Good
Seven in ten respondents to our 2016 Global Survey of Individual Investors said they believe it is important to invest in companies that have a positive social impact. An equal number reported that sound corporate environmental records are important to them.1 These data points suggest an opportunity for advisors to talk to their clients about how today’s ESG investing is not limited to an exclusionary, one-dimensional approach that weeds out bad actors, or “sin stocks.”
The Sustainable Evolution
Positive opportunities created by secular trends in the economy, such as sustainable infrastructure, renewable energy, smart utility grids, and green development are all themes that are playing out in markets across the world. Rather than serving as niche strategies for asset managers, sustainable investment approaches can comprise of diversified equity portfolios capable of playing a core role in investor portfolios and retirement allocations.
Saving for the Future
As more responsibility for funding retirement falls to individuals, advisors play a role in helping to ensure that they are set up to succeed over the long term. For investors interested in more closely aligning how they manage and invest their money with their personal values, sustainable investing opportunities could provide incentive for increased focus and participation in retirement planning.
Follow us on Twitter @NatixisGlobalAM and join the conversation about ESG and retirement planning using the hashtags #GenerationSave and #RetireResponsibly.
1 Natixis Global Asset Management, Global Survey of Individual Investors compiled by CoreData Research, February 2016. Survey included 7,100 investors in 22 countries, including 750 investors in the U.S.
This material is provided for informational purposes only and should not be construed as investment advice. The views and opinions expressed above may change based on market and other conditions. There can be no assurance that developments will transpire as forecasted.
Diversification does not guarantee a profit or protect against a loss.
All investing involves risk, including the risk of loss.
ESG Investing focuses on investments in companies that demonstrate adherence to environmental, social and governance (ESG) practices, therefore the universe of investments may be reduced. An ESG strategy may sell a security when it could be disadvantageous to do so or forgo opportunities in certain companies, industries, sectors or countries. This could have a negative impact on performance depending on whether such investments are in or out of favor.
A better understanding of sustainable investing can start with a definition of terms.
Explore the history of climate change, along with potential economic opportunities in the years ahead.
Why more corporations and governments are going green, areas of expansion, and what exactly makes a green bond green.