Getting to Know ESG

ESG Investing – A Practical Guide

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Environmental, Social, and Governance (or ESG) investing is gaining popularity amongst many different types of investors. It’s easy to understand broadly the benefits of socially-responsible investing, but there’s actually a lot behind it. One thing is for certain, the opportunity to do well and do good within a portfolio is an attractive concept to many.

Learn more about ESG investing with our practical guide below.

What is ESG?



Environmental reflect, in short, how a company affects nature, and vice versa.

This may include factors such as climate change, carbon emissions, water usage, waste, or renewable energy.



Social examines a company’s relationship with its stakeholders.

This may include reviews of human rights, employee relations, working conditions, and use of child labor among customers, suppliers, employees and their community or region.



Governance focuses on corporate leadership, policies and company structure.

This may include board and management diversity and structures, executive pay, auditing and compliance policies, corruption prevention, or transparency.

We believe that ESG integration is aligned with our fiduciary duty to serve our clients, and this aligns with who we are as a firm. Through our unique ownership structure, generating results for clients can also improve health and save lives. Together, we can be a powerful force for good.
Jonathan Thomas, President, CEO

Let’s Clear Up Any Confusion

There are a lot of buzz terms when it comes to responsible investing. Here’s what they mean:

Applying norms-based or values-based (SRI) screens to exclude companies whose business activities do not meet client-specific values or guidelines or that violate “universal norms.”

Systematically integrating extra financial variables or issues not captured by traditional financial analysis in an effort to help manage downside risk or capture upside potential.

Putting greater weight on companies with the strongest ESG characteristics (e.g., ESG ratings or scores, carbon emission intensities).

Investing in companies whose business activities are aligned with a specific theme or series of themes (e.g., clean tech) or whose management meets a thematic threshold (e.g., strong board gender diversity).

Generating a measurable social and environmental impact alongside a potential financial return. The impact could also be associated with a specific theme or framework (e.g., UN Sustainable Development Goals).

Where appropriate, approaches may be combined. For example: A clean tech thematic fund looks to map investments to selected UN Sustainable Development Goals while integrating ESG factors to select companies for inclusion.

Aerial view of water processing facility.

Impact Investing Addresses
the Sustainable Development Goals (SDGs)

A collection of 17 global goals set by the United Nations General Assembly.

UN Sustainable Development Goal 1: No Poverty
UN Sustainable Development Goal 2: Zero Hunger
UN Sustainable Development Goal 3: Good Health and Well-Being
UN Sustainable Development Goal 4: Quality Education
UN Sustainable Development Goal 5: Gender Equality
UN Sustainable Development Goal 6: Clean Water and Sanitation
UN Sustainable Development Goal 7: Affordable and Clean Energy
UN Sustainable Development Goal 8: Decent Work and Economic Growth
UN Sustainable Development Goal 9: Industry, Innovation and Infrastructure
UN Sustainable Development Goal 10: Reduced Inequalities
UN Sustainable Development Goal 11: Sustainable Cities and Communities
UN Sustainable Development Goal 12: Responsible Consumption and Production
UN Sustainable Development Goal 13: Climate Action
UN Sustainable Development Goal 14: Life Below Water
UN Sustainable Development Goal 15: Life on Land
UN Sustainable Development Goal 16: Peace, Justice and Strong Institutions
UN Sustainable Development Goal 17: Partnerships for the Goals
UN Sustainable Development Goals Logo

Who is Driving ESG?

Everyone, really. But many are consumers. Young consumers. Employees, customers and institutions demand that businesses rethink the way they work in the world to be more purpose-driven and sustainably-focused.

Survey Says…Consumers Are Demanding More Responsible Investing

Of Respondents

Found social impact to be important in their investing decisions, an increase from prior years.

{sup}(American Century Investments, 2019){/sup}

Of Respondents

Were millennials in the U.S. who were attracted to the idea of impact investing

{sup}(American Century Investments, 2019){/sup}

Of Respondents

Were consumers who agreed they would switch to a brand that supports a cause they believe in

{sup}(Mintel, July 2018){/sup}

Aerial view on boat on large river.

And it’s not just a trend.

In 2020, there were $51.1 billion in net flows into ESG-related investments. In 2021, that number had risen to $70.9 billion – more than a 40% rise!

{sup}(Source: Morningstar Direct, Dec. 2021){/sup}

Why ESG?  What’s in it for Me?

Investing in companies that are good for the world and good for society isn’t just about making you feel good. Integrating these factors into investment analysis may help to…


Manage Risk

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Provide Opportunities


Positively Impact the World

Some Things to Consider

ESG approaches vary based on types of assets, time horizon, objectives and more. There are many different ways to apply ESG to investment choices.

• ESG objectives
• Research
• Long-term
• Benchmarks
• Metrics

Wind turbines on hilly landscape.

When you boil it all down, ESG investing is simply about making a difference.

Seeking to both do well and do good. 

When portfolio managers incorporate Environmental, Social and Governance (ESG) factors into an investment strategy, they consider those issues in conjunction with traditional financial analysis. When selecting investments, portfolio managers incorporate ESG factors into the portfolio's existing asset class, time horizon, and objectives. Therefore, ESG factors may limit the investment opportunities available, and the portfolio may perform differently than those that do not incorporate ESG factors. Portfolio managers have ultimate discretion in how ESG issues may impact a portfolio's holdings, and depending on their analysis, investment decisions may not be affected by ESG factors.

Sustainable Development Goals (SDGs) are a collection of 17 global goals set by the United Nations General Assembly. They were developed by a global team of industry and government leaders and adopted by all 193 member states, the SDGs include 17 goals and 169 attendant targets aimed at solving some of the world’s most pressing problems by 2030. The goals include eradicating poverty, providing environmental resources, and achieving gender and income equality.

This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.

Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.