At Fiduciary Trust, we believe that analyzing ESG data, in conjunction with traditional financial criteria, can enhance investment decision making, regardless of whether positive ESG performance is a key investment objective. In addition, with an increased focus on ESG factors across global investment markets, there is an expanding range of investment opportunities with favorable ESG ratings which reduces the need to make tradeoffs between SII and return.
Given our ESG beliefs combined with our client-customized approach to investment management, Fiduciary Trust’s investment offering covers a range of ESG options, as illustrated below.
The Role of ESG Factors in Fiduciary’s Investment Offering
For those clients who want to take a more proactive approach to ESG, our “ESG Focus” offering has been enhanced. For these clients, we generally recommend our “ESG Core” program which maintains broad diversification across asset classes while focusing on investments with high ESG ratings. This enables individuals and trusts to pursue a “pro-ESG” strategy while seeking to maintain performance in line with traditional benchmarks.
For clients who invest in individual U.S. equities, we also offer an ESG-focused proxy voting service. When there are ESG-related issues that arise in shareholder votes, a client’s shares are voted using a pro-ESG lens. Finally, Fiduciary also offers specific approaches to SII, such as funds that focus on social or environmental objectives in addition to financial returns, or shareholder activist funds that seek to exert strong influence on corporate boards to pursue positive ESG policies.
Looking to the Future
Interest in sustainable and impact investing strategies has been growing at a brisk pace in the asset-management industry. The availability of ESG information to inform investment decisions has advanced significantly as well, although there are still a number of limitations. The increased ESG focus is leading a large and growing number of companies to enhance their ESG performance, which, overall, benefits both ESG and non-ESG focused investors.
If you are interested in taking a more proactive approach to SII, a Fiduciary Trust Investment Officer can help you determine which SII strategy could be most effective at meeting your goals in the context of your overall wealth plan.
The opinions expressed on this page are as of the date issued and subject to change at any time. Nothing contained herein is intended to constitute investment, legal, tax or accounting advice, and clients should discuss any proposed arrangement or transaction with their investment, legal or tax advisers.