Bill Davis Explains How ESG Investment Products Are Built

ESG Decoded is the podcast powered by Global Affairs Associates, a ClimeCo company, to share relevant updates related to business innovation and sustainability in a manner that is clear and actionable.

In this episode, Kaitlyn Allen talks with Bill Davis, founder of Stance Capital. The firm was established in 2016 to bring to market investment portfolios that mitigate material environmental, social, and governance risks and generate excess returns, while at the same time allowing investors to align their portfolios with their belief systems. Bill has a BA from Connecticut College, and he has taught or been a guest lecturer at Columbia University, Harvard College & Harvard Business School, MIT & MIT Sloan, and Vanderbilt University. Bill also serves on the boards of Ceres and the Children’s Environmental Literacy Foundation.

For context, in the early 2010’s, asset management firms with “ESG” products really were not in the business of portfolio construction; they were more activist shareholders, using investment fees to pay for future activism. Bill knew there was a better way to align investments with values and generate alpha through rigorous portfolio construction, which led to the establishment of Stance Capital.

Listen as Kaitlyn and Bill clarify some common ESG-related terms including: ESG investing vs. impact investing, and greenwashing. They also remind us that the genesis for intentional focus on ESG data gathering started with voluntary CSR reports filed by companies.  (At present, the vast majority of S&P 500 companies are now preparing these filings.)  Bill and Kaitlyn also cover the three key elements of portfolio construction, coupled with the importance of having industry-specific comparisons and measurements.

As a point of what we hope is inspiration to our listeners, Bill’s road to this innovation within sustainability stemmed from an epiphany at a transfer station in Winchester, Massachusetts. Another reminder, that amazing things happen for people, business, industries, and society when we dare to lean into seemingly wild ideas!

Be sure to check out the resource boosts for this episode:

·  Stance’s Investment Performance Summary | Stance Capital

·  Stance Equity ESG Large Cap Core ETF (stancefunds.com)

·  ESG ETFs, Sustainable Investments | Stance Capital

·  Children's Environmental Literacy Foundation - Children's Environmental Literacy Foundation (celfeducation.org)

·  Ceres

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