We are Registered Investment Advisors committed to help you align your values with your investment portfolio. To facilitate meeting your goal of investing responsibly whenever possible, we look for companies and funds with practices and policies in place that balance effective Environmental, Social and Governance (ESG) standards with the commitment to provide competitive returns to their shareholders.
Integrating ESG into Investment Portfolios
We believe strongly that companies scoring well on ESG measures contribute positively to overall investment performance. So much so that we include some carefully selected ESG-related funds in all client accounts. For those clients who have a particular affinity for this approach, we offer a variety of portfolios with a heavier ESG focus.
ESG – The Future of Growth?
Well conceived and followed Environmental, Social, and Governance (ESG) policies can strengthen a company’s business model, make it more competitive, and provide a platform for increased profitability and growth.
The longevity of a company is tied to its commitment to environmental friendliness, which often leads to reduced costs and increased efficiencies. Being a good steward of natural resources, and creating a plan to deal with the impact of climate change on the business, reduces the risk of future crises that can severely cripple ongoing operations. Managing risk effectively is an outcome of such awareness and planning.
Social considerations like fair treatment of employees and suppliers reduces costs such as high employee turnover. Maintaining a safe and healthy place to work adds to this benefit. A richly diverse employee population facilitates more creative idea exchange and collaboration in providing goods or services to consumers.
Governance is commonly the most overlooked of the three ESG factors. Yet, a strong, diversified Board of Directors can oversee a corporate governance system of principles, policies and procedures that prevents and/or more easily resolves potential conflicts and risks inherent in a corporation. A robust corporate governance system is, therefore, essential to reducing operational risk and increasing sustainability within organizations. In addition, we’ve found that a company with a strong score in Governance more often has strong scores in the Environmental and Social areas as well.
Sustainable Investing - Socially Responsible Investing - Impact Investing
Responsible investing has over time taken on different titles: Sustainable Investing (SI), Socially Responsible (SRI) Investing, and now ESG Investing all refer to investment disciplines that consider environmental, social, and corporate governance (ESG) criteria in making investment decisions. Following these guidelines has the added benefit of enhancing long term performance of the investment portfolio and managing risks while aligning personal values.
Impact investing is a specialized subset that refers to investments made in companies, organizations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return. This is done through shareholder activism, directly encouraging companies to improve on specific ESG measures.
Performance
Regarding investment performance, companies with strong ESG scores are much more likely to avoid legal and liability problems, as well as management problems, reducing the risk in owning these stocks. As well, there are important studies illustrating that overall market performance of companies with strong Environment, Social and Governance policies generally outperform their less responsible peers.
Our Responsibilities as a Fiduciary
In serving Marin and the greater S.F. Bay Area we believe in placing our client’s best interests first. Therefore, we commit to the following five fiduciary principles:
- We will always put our client’s best interests first.
- We will act with prudence; with the skill, care, diligence, and good judgment of a professional.
- We will not mislead you. We provide conspicuous, full and fair disclosure of all important facts.
- We will avoid conflicts of interest.
- We will fully disclose and fairly manage, in your favor, any unavoidable conflicts.