Although socially responsible investing is not new, it has seen a surge of interest since the signing of the Paris Climate Agreement of 2015. Environmental, social, and governance (ESG) investing is a strategy of sustainable investing that considers these three attributes to evaluate the impact of the company as well as their returns. Companies who rank well with ESG criteria tend to be more stable investments investments than those who do not. A company that makes poor ESG decisions is more likely to suffer from financial loss related to issues related to environmental, social, or governance matters.
10 Ways to Find the Right Investment Manager to Help You Achieve Your Impact Investing Goals
- It is at the core of a successful and long term relationship. If there isn’t a good rapport at the outset, you should keep looking and importantly, trust your instincts. Do you trust the investment adviser will align your portfolio with your values?? Ask for references and do the work to make sure you are investing with credible people.
- Who will be investing your money? Who will make the decisions regarding impact investments? Does the firm have a deep bench? Will they be accessible if you have questions or would like to speak to them? Make sure you understand and are comfortable with the people and firm that will be managing your investments.
- Before discussing your environmental, social, and governance priorities, ask about the adviser’s investment philosophy and process. Similar to an organization’s mission statement, an investment manager’s investment philosophy should describe its strategy for generating investment returns. The investment process should be a longer description of how the investment adviser executes its philosophy.
- Invest for the long term. Choose an investment adviser who helps you plan for the long term. Not only is this the best way to grow your wealth, it also aligns your investments with the most effective approach to impact investing.
- Understand the ESG strategy. Lots of impact investing strategies sound good on paper, but make sure you understand how companies are analyzed, how their commitments to social responsibility are measured, and how the adviser constructs portfolios.
- Demand customization! Avoid cookie-cutter solutions that are not tailored to your specific needs and goals.
- Fee transparency. Understand how much you are paying, and what you are getting for your money.
- Other services. What else is included, beyond investment management and credible impact investing, in the fees you are paying?
- Compare and contrast. Once you have identified a short list of advisers, compare them across each metric that is important to you.
- Ask questions! There is no such thing as a stupid question. Make sure you understand what you are buying, and do not be afraid to seek further clarification on anything that does not make sense to you.
Impact Investing in Boston: The Howland Capital Management Approach
Howland Capital has been implementing impact investing strategies for over ten years. We want to ensure that your portfolio reflects what is important to you. Our ESG offerings use our proprietary investment process at the core. We offer customizable solutions for individual client portfolios. We align your investments with your values without sacrificing investment returns.
Howland Capital’s Five Core Impact Investing Beliefs
- Make a difference. Regardless of how much money you have, you can use your wealth to positively impact environmental, social, and governance outcomes.
- Have your cake and eat it too! Strong investment performance and effective impact investing strategies are not mutually exclusive. Generating strong investment performance should be a primary goal for all investment strategies, including impact investing. If you are not effectively expressing your environmental, social, and/or governance wishes while simultaneously growing your wealth, you may want to look for a new investment adviser.
- No two people are the same. Wealth management needs can vary dramatically based on an individual’s unique circumstances. At the same time, impact investing also is not a one-size-fits-all endeavor. Effective impact investing solutions should be tailored to an individual’s (or family’s, organization’s) environmental, social, and governance preferences.
- Measure results. Investment advisers and managers should be able to explain and quantify how they are achieving the specific impacting results they provide.
- Maintain a sound investment strategy. Regardless of ESG interests and impact investing goals, investment portfolios should be constructed with appropriate diversification, risk management, and asset allocation goals in mind. Understanding your risk profile, investment time horizon, and other important characteristics is crucial, no matter what!
Background on Howland Capital:
Howland Capital is an independent registered investment adviser offering a customized approach to wealth management for individuals, families, foundations, and institutions. Our team is focused on the long term to ensure that wealth acts as a positive influence in our clients’ lives. We are committed to remaining independent in order to provide the stability and continuity that our clients deserve.