Socially Responsible Investing & the Rise of 'ESG'

Risk Disclaimer:
The content expressed in this program is for general and informational purposes only and is not intended to provide: (i) specific & individualized investment advice or recommendations, (ii) a promise or guarantee of any specific outcome, and (iii) is not intended to be used as the basis for you or your client's investment decisions.  All investments in securities involve the risk of loss, and any discussions regarding past investment performance or any forward-looking performance statements or projections are never a promise or guarantee of future results.

“ESG", as referred to herein, refers in the broadest sense to encompass terms such as “socially responsible investing (SRI),” “sustainable,” “green,” “ethical,” “impact,” or “good governance” to the extent they describe environmental, social, and/or governance factors that may be considered when making an investment decision. 

Different ESG approaches may entail investment, marketing, and compliance risks that are unique to those approaches.  The lack of standardized and precise ESG definitions present certain risks. For instance, the variability and imprecision of industry ESG definitions and terms can create confusion among investors if investment advisers and funds have not clearly and consistently articulated how they define ESG and how they use ESG-related terms, especially when offering products or services to retail investors. Actual portfolio management practices of investment advisers and funds should be consistent with their disclosed ESG investing processes or investment goals.  As certain social criteria may exclude securities of certain issuers for non-financial reasons, ESG investments are subject to the risk that investors may forego some market opportunities available to those who do not use these criteria.