Unlock the Benefits of Sustainable Investing

Unlocking the benefits of sustainable investing can be a game-changer for your finances and the planet. By investing in companies that prioritize environmental and social responsibility, you can potentially earn higher returns while making a positive impact.

Research shows that companies with strong ESG (Environmental, Social, and Governance) practices tend to outperform those without. For example, a study found that ESG-focused funds outperformed their non-ESG counterparts by 4.7% per year over a five-year period.

Investing in sustainable companies can also help mitigate climate change and promote social justice. By supporting businesses that adopt renewable energy, reduce waste, and promote diversity and inclusion, you're contributing to a more equitable and sustainable future.

Consider this: a report found that sustainable investing can generate an average return of 4.1% per year, outpacing traditional investing by 1.1%.

Sustainable investing considers a company or investment's impact on the environment and society in addition to financial returns.

Sustainable investing often uses environmental, social and governance (ESG) criteria when evaluating an investment.

Sustainable investing often includes green energy investments, such as wind or solar.

By considering a company's ESG criteria, investors can make more informed decisions that align with their values and goals.

Investors who prioritize sustainability may choose to invest in companies that use renewable energy sources, like wind or solar power.

This approach can help investors feel more confident that their investments are not only profitable but also contributing to a better future.

Sustainable investing is a way of judging the investments you'd like to add to your portfolio, taking into account environmental, social, and governance (ESG) factors.

By considering ESG risks and opportunities, companies that proactively manage these issues are best positioned to survive and thrive in a resource-constrained world. WRI has committed to invest its endowment in a prudent manner that incorporates how companies manage ESG risks and opportunities.

Sustainable investing can have a significant impact on companies' decisions, such as reducing deforestation in Southeast Asia through shareholder advocacy and proxy voting. As an investor, you can exercise your proxy vote and request an impact report to see the effect your investment has had on the real world.

The perception of what constitutes sustainable investing has changed over time, with the concept of the 'triple bottom line' of the 'three Ps' emerging in 1995. This includes considering the three Ps of 'People, Planet, Profit' as equally important for long-term success.

Here are some common definitions of sustainable investing:

Sustainable investing is a smart move because it considers the long-term impact of investments on the environment and society.

Companies that proactively manage environmental, social, and governance (ESG) issues are best positioned to survive and thrive in a resource-constrained world.

Research has shown that sustainable funds may offer investors less downside risk than traditional funds, even in crashing markets.

In fact, 24 out of 26 ESG index funds outperformed comparable conventional funds during the first quarter of 2020, when the market was dipping due to the COVID-19 pandemic.

Investing sustainably is not only beneficial for the environment and society, but also for your financial well-being.

By incorporating ESG considerations into their investment approach, WRI aims to maintain and increase their financial resources to support their mission.

The concept of sustainable investing has come a long way, and its definition has evolved over time. The Quakers of the 18th century were among the first to use ethical principles in business transactions, refusing to deal with anyone involved in the slave trade.

Sustainable investing has progressed further with the notion of the 'triple bottom line' of the 'three Ps', which was introduced in 1995 by British businessman John Elkington. This concept emphasizes the importance of considering People, Planet, and Profit equally for long-term success.

The bedrock of most sustainable investing processes today is environmental, social, and governance factors, or ESG. This approach considers the potential impact of investments on the environment and society, in addition to financial returns.

Sustainable investing is not just about avoiding harm, but also about creating positive impact. Impact investing, for example, targets a measurable beneficial impact on the environment or society, while also earning a positive financial return.

Some common definitions of sustainable investing include 'ethical investing', 'socially responsible investing', and 'impact investing'. While these terms may have slightly different connotations, they all share the goal of creating a better world through investment.

Here are some examples of sustainable investment strategies:

These strategies can help investors achieve their financial goals while also creating a positive impact on the world. By considering the environmental, social, and governance factors of their investments, sustainable investors can make a difference and benefit the world we live in.

Sustainable investing is all about considering an investment's impact in addition to its financial return. It's a way to align your investments with your values and goals, while also potentially generating positive social and environmental outcomes.

You can start by choosing a sustainable investment strategy that fits your needs. Some options include negative/exclusionary screening, which excludes specific sectors or companies from your portfolio based on ESG criteria, and positive/best-in-class screening, which invests in companies that perform well on ESG factors compared to their peers.

Robo-advisors like Betterment, Wealthfront, and Merrill Edge Guided Investing offer automated sustainable investment portfolios that use ESG funds and exchange-traded funds. These portfolios can be customized to meet your individual needs and risk tolerance.

ESG factors are a key consideration in sustainable investing, and they typically include environmental, social, and governance metrics. Environmental factors might include a company's carbon footprint, waste management, and water conservation practices, while social factors might include its record on human rights, diversity, and community engagement.

Here are some common ESG strategies:

Ultimately, the best sustainable investment strategy for you will depend on your individual goals, risk tolerance, and values.

You have several options to consider when it comes to sustainable investing. One option is to partner with an Outsourced Chief Investment Officer (OCIO) to manage your endowment and help implement a sustainable investment strategy, as World Resources Institute (WRI) has done.

You can also consider using a robo-advisor, which uses computer algorithms to build and manage an investment portfolio based on your timeline, risk tolerance, and other personal factors. Robo-advisors often charge a lower fee than traditional financial advisors and many now offer automated sustainable investment portfolios for no additional charge.

Some popular robo-advisors that offer sustainable investment portfolios include Betterment, Wealthfront, and Merrill Edge Guided Investing.

Selecting investments can be a daunting task, but it doesn't have to be. One way to make ESG-based investments is by researching top-rated ESG stocks, which can be found on annual "best of" lists published by analysts and organizations.

You can also opt for ESG-centric funds from brokerages by searching "ESG" in their screening tools. This can be a more hands-off approach to investing, and it's a great way to diversify your portfolio.

Robo-advisors are another option for sustainable investing. These platforms use computer algorithms to build and manage investment portfolios based on your timeline, risk tolerance, and other personal factors. Some popular robo-advisors that offer sustainable investment portfolios include Betterment, Wealthfront, and Merrill Edge Guided Investing.

If you prefer a more guided and slightly less do-it-yourself investing approach, consider working with an ESG financial advisor. These professionals will consider your entire financial portfolio and personal goals when creating your investment strategy.

Here are some popular sustainable investment options to consider:

Ultimately, the key to selecting sustainable investments is to do your research and find the options that align with your values and goals.

WRI has joined the Intentional Endowments Network, which offers peer-to-peer learning opportunities with other asset owners.

This allows WRI to engage with like-minded organizations and support the advancement of sustainable investment practices in the mainstream investor marketplace.

WRI is also a part of the Climate Action 100+, an investor initiative focused on ensuring the world's largest corporate greenhouse gas emitters take necessary action on climate change.

As a participant in Climate Action 100+, WRI is contributing to a broader effort to address climate change through collective action with other investors.

Fidelity's Sustainable Investing Framework (FSIF) provides a common language for developing products that meet clients' traditional investment and sustainability preferences.

The FSIF includes modules that classify products by their degree of sustainability commitments and aim to align with the standards of relevant sustainability legislation or sustainability labels, as required.

Fidelity's FSIF has three categories: ESG Unconstrained, ESG Tilt, and ESG Target, each with its own set of exclusions.

The ESG Unconstrained category includes products that may or may not integrate ESG risks and opportunities into the investment process, while the ESG Tilt category includes products that aim to generate financial returns and promote environmental and social characteristics through a tilt towards issuers with stronger ESG performance.

The ESG Target category includes products that aim to generate financial returns and have ESG or sustainability as a key investment focus or objective.

The FSIF is complemented by market-specific requirements, including the Sustainable Finance Disclosure Regulation (SFDR) in Europe and the Sustainability Disclosure Requirements (SDR) in the UK.

Here is a summary of the three categories in Fidelity's FSIF:

Fidelity also has an Exclusion Framework that includes three levels of exclusions, which are applied in addition to the FSIF categories.

The Exclusion Framework excludes issuers from the investment universe based on specific ESG criteria, and the exclusions are applied at different levels depending on the category.

Fidelity's Exclusion Framework is designed to minimize exposure to ESG risks and promote environmental and social characteristics.

By using these frameworks and methodologies, Fidelity aims to provide clients with investment products that meet their traditional investment and sustainability preferences.