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What is ESG Investing?
ESG Investing focuses on three specific factors: Environmental, Social, and Governance. ESG investing means purposefully investing in companies that meet certain criteria with respect to
- their use of resources (environmental)
- how they are run (governance),
- or their impact on employees and society (social).
It is not new, but it is growing in popularity and over the past several years as investors recognize these factors can impact a company’s performance in the marketplace. At Passport Wealth Management, these factors are a part of our investment management approach.
What factors are involved in ESG Investing?
How does Passport Wealth Management help with ESG Investing?
Many financial planners and savvy investors seek out funds that make use of ESG data. Research increasingly shows that ESG portfolios perform similarly to non-ESG portfolios, and that incorporating ESG data may even provide an improved return over the long run. Think of this data as a GPS system compared to an old map and compass, it’s not necessarily better, it’s just more information. Some market professionals believe that this information may also result in less risk since ESG funds could help weed out companies that are a greater financial risk due to their governance, environmental, or social practices. This is called improving the risk-return profile.
Guided by each client’s individual Investment Policy Statement (IPS) we develop at the outset of our relationship; Passport Wealth Management regularly incorporates ESG data into investment management decisions about client portfolios.
For more information on our investment management philosophy, ESG investing, or holistic financial planning, please give us a call at (704) 457-0060. Passport Wealth Management works with clients around the world from our offices on the shores of Lake Norman in North Carolina.