Invest in Our Planet: Make Every Day, Earth Day

As investors, there is a lot we can do to make a positive impact and support change. Earth Day is a yearly reminder to put your money where your values are by digging deeper into the importance of environmental protection and sustainable development. 

What is ESG Investing?

Environmental, Social, and Governance (ESG) criteria is a framework companies use to evaluate their sustainability. ESG Investing is a strategy that allows investors to align their portfolios to businesses that uphold ethical standards and directly reflect their values.  Ultimately, it aims to generate returns while also considering the impact of investments on society. 

According to the Morgan Stanley Institute for Sustainable Investing, “the vast majority of asset managers and owners (77%) reported an increase in ESG investing interest since May 2020, driven by shifting public sentiment, regulatory developments, and pressures from clients and investors.” So as long as we keep creating awareness and focusing on positive contributions, we are on track to changing our planet’s destiny for the better. 

How To: Start Leaving A Positive Footprint

Start by examining your existing portfolio and researching the ESG investments you would be interested in. Ensure these investments align with your financial goals, risk tolerance, personal values, and expected portfolio performance. Working with a financial advisor might help guide you through all the essential factors that make these investments impactful on the world and your personalized plan. 

“E” Stands for Environment 

In a survey about Earth Day activities, 22% of the respondents said they would do something impactful to help our planet. So, if you’re wondering how to tie the “E” in ESG to taking action, here are a few guidelines that might help: 

1. Identify your investment goals: Before starting ESG investing, ask yourself the following questions. What are you hoping to achieve with your investments? Are you looking to generate returns while also making a positive impact on the environment and society? By understanding your investment goals, you can select the right ESG investments that align with your values.
2. Educate yourself: ESG investing can be complex, and it’s essential to understand the different types of ESG investments available. Many resources are available to comprehend ESG investing better, including articles, books, online courses, and subject-matter experts in Zoe’s Advisor Network.
3. Research ESG investments: Once you’ve identified your investment goals and gained a basic understanding of ESG investing, the next step is to research ESG investments that align with your values. Several ESG funds, ETFs, and individual stocks are available, and it’s essential to study these investments’ performance, fees, and underlying holdings.
4. Assess the ESG criteria: ESG investments are evaluated based on environmental, social, and governance requirements. Environmental standards assess the impact of the investment on the environment, social measures evaluate the effects on society, and governance criteria evaluate the company’s management practices. Therefore, assessing the ESG criteria of the investments you’re considering is essential to ensure they align with your values.
5. Evaluate the financial performance: While ESG investing aims to impact society and the environment positively, it’s still important to evaluate the financial performance of the investments you’re considering. Look at the historical performance of the investment, its fees, and its risk profile to ensure it’s a good fit for your portfolio.
6. Monitor your investments: Once you’ve made ESG investments, monitoring them regularly is key. Be sure to stay up to date on the performance of your investments and any changes in the ESG criteria.

ESG investing allows you to contribute to sustainable development. By following these steps, you can get started with ESG investing and positively impact the planet.