While sustainable investing has been in practice for decades, interest in this area has grown dramatically over the past several years as investors have been seeking strategies to enhance performance and improve lives. At Fiduciary Trust, we view sustainable investing through an Environmental, Social, and Governance (ESG) factors lens.
We believe ESG-focused investment decision-making is well aligned with being an active capital owner as it:
Promotes corporate accountability
Expands decision-making information
Increases attention on the long-term
Incorporates the importance of ethical business practices
What is Fiduciary’s Approach?
Given the potential for ESG factors to enhance investment returns [link to McKinsey study in our insjghts, if permitted], we consider ESG factors in all of our investment decisions. While the portfolios defined by our firm-level guidance have positive ESG ratings, we also have a range of options for clients who want to take a more proactive approach to sustainable investing:
ESG Integrated Portfolios
Pursue investments with high ESG ratings in a diversified portfolio
Many clients are interested in pursuing a proactive, positive ESG strategy, while also achieving investment returns consistent with standard benchmarks. Our ESG Integrated Portfolios are diversified across asset classes and focused on securities and funds with high ESG ratings and proactive ESG strategies. These portfolios span a range for risk profiles, serve as guideposts for custom client portfolios, and have historically produced returns consistent with our standard portfolios.
Avoid investments which can negatively impact the environment or society
Examples include fossil fuels, alcohol, firearms, and gambling
Support issues that are important to you while also generating investment returns
Examples include renewable energy, energy efficiency, water, inclusive finance, education, and health
Produce tangible environmental or social impact while pursuing financial returns
Examples include conservation-based project financing, micro-finance to minority-owned small businesses, and social impact bonds
Recognizing the clients have a variety of objectives and needs in pursuing a sustainable investing strategy, we take a customized approach to constructing and managing a client’s portfolio. This may involve mixing traditional and sustainable investment options, implementation approaches to minimize taxes, and other client-specific adjustments.
Reach out to a Fiduciary Trust officer to learn more about how we can help you pursue a sustainable investing approach.