SRI Investing

We believe that the "Move Your Money" campaign, encouraging people to move their checking and savings accounts out of the banks that helped create the financial crisis, and into local community-based credit unions and small regional banks, is a great idea; but only a good first step.   We encourage you to take a stand and really make a difference with your money in what we call "Move Your Money 2.0", transferring your other investment assets, credit cards, and retirement accounts into accounts that provide investment options more closely matching your values and that can potentially have more positive societal impact, whenever possible and prudent.  Nearly $1 out of every $6 is now invested with Environmental, Social, and Governance (ESG) criteria.  Yet according to a 2012 survey by US-SIF, over 1/2 of the population would choose to do more with their money if given the opportunity.  So, we still have a long way to go. Take a stand and Be part of the solution!  And we are here to help you!

  • Does SRI/ESG Investing hurt performance?

    • Bursting the Myth of Under-performance

      US-SIF Research shows sustainable investing provides competitive and sometimes superior returns with less risk.The myth that investors must sacrifice performance to invest with their values is simply untrue, and a myth that many would like for you to continue to believe.

      According to the 2014 US-SIF SRI Trends Report-Numerous money managers and institutions show that ESG screened portfolios can at times out-perform identical non-screened portfolios.  So, rather than detract from performance, ESG screens can add value to help avoid some potential risks of companies that don't incorporate prudent ESG practices in management of their companies. Their studies show that being green also makes good business sense in other ways, such as long-term energy savings, lower litigation costs, and having to pay less to borrow money, all improvements to their bottom lines.  This is why we are seeing more businesses adopting sustainable business practices. Sustainable business practices and more transparency and accountability aren't just good for image purposes.  Although we need to be careful of companies "green-washing" or claiming to do more than they really are in these areas.  

      A growing number of academic studies demonstrate that SRI/ESG mutual funds perform competitively with non-SRI/ESG funds over time.

      Numerous money managers and institutions show that ESG screened portfolios out-perform identical non-screened portfolios. So, rather than detract from performance, ESG screens add value to help avoid some potential risks of companies that don't incorporate prudent ESG practices in management of their companies. Studies show that being green also makes good business sense in other ways, such as long-term energy savings, lower litigation costs, and having to pay less to borrow money, all improvements to their bottom lines. This is why we are seeing more businesses adopting sustainable business practices. Sustainable business practices and more transparency and accountability aren't just good for image purposes. Although we need to be careful of companies "green-washing" or claiming to do more than they are in these areas.

      The MSCI KLD 400 Indx outperforming the S&P 500 Index from 6/30/1995 to 12/31/2015 by 100% over the 20 year period equivalent to 5% per year average outperformance.  Past performance is not a guarantee of future performance and it is not possible to directly invest in an index.  Therefore your performance may differ.  See attachment.

  • What Is Sustainable Responsible Impact (SRI) investing About?

    • Is SRI investing just something to make you feel better about your money, or can it really make a difference in the world? We believe that money talks and has tremendous power to make significant impact. The trend is growing, but we need all to take a stand against greed and the antiquated status quo of maximizing profits at any expense to our planet, people and resources. SRI investing is one of the best and most effective ways we know of to oppose the status quo and to bring about significant change and impact in our troubled world.

      We can create a better world where every child is safe, healthy and free.

      Sustainable Responsible and Impact (SRI) investing starts with the same fundamental financial analysis tools commonly used by all financial managers, but integrates additional holistic and rigorous levels of scrutiny and risk analysis of Environmental, Social and Corporate Governance, (ESG) issues acting to improve corporate behavior for the benefit of all stakeholders.

      Sustainable investment firms look to invest in companies that meet both fundamentally financially strong criteria, and that also incorporate ESG factors intelligently into their business decisions. These companies may perform better and be better business risks, because their managers focus on the long-term view, require transparency and accountability throughout the organization and promote clear environmental and workplace risk reduction policies.

      ESG screening can help identify and rule out potentially adverse corporate risks.

      We first try to engage and dialog with corporations to influence them to change corporate behavior to better manage these risks. If these efforts fail, then we can utilize shareholder activism and corporate resolutions, such as proxy voting. If still unsuccessful, we can move on to more extreme actions, such as boycotts, divestment, or to support legal action, if all other attempts fail to bring about the desired corporate behavioral changes. The ultimate desired results are to improve all corporate behavior, not just screen out "bad" companies, because we all share the same planet, air and water, and we only have one planet. "So, we need to learn to share."

                   ESG Criteria Chart

Environmental Social Governance
Air and Water Management Access to Medicines Accountability
Pollution Control Exploitation

Executive Pay

Energy Efficiency Diversity Transparency
Climate Change Risk Reduction Child Labor Independent Boards
Renewable Energy Equal Opportunity & Diversity Philanthropy
Nuclear Power Gender Equality Community Involvement
Environmental Technologies Conflict & Repressive Regimes Corporate Social
Waste and Toxic Chemical Mgmt Supply Chain Management Responsibility
Biodiversity Community Initiatives Women and Minorities
Mining and Quarrying Labor Relations In executive Positions
Genetic Engineering Health and Safety Living Wage
  Dignity and Human Rights  

 

Sustainable investment firms realize that no company is perfect.  We have accomplished many successes.  We also see that much can and is being done by engagement and having open dialog with companies encouraging them to change to improve their scoring in these and other areas. 

 

 

Contact Us

6317 Fairmount Avenue
El Cerrito, CA 94530
Phone: (510) 524-5500  
Email: allan@transformativewealthmgt.com

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