With Sustainable, Responsible, and Impact Investing
You recycle. You ride your bike to work or drive a hybrid. You eat organic foods and buy fair trade clothing. Why wouldn't you invest with the same values that you live your life?
According to US SIF, since 1995, responsible investments have grown from $639 billion to over $17 trillion. And, performance of sustainable, responsible and impact portfolios is competitive with traditionally managed investments - why wouldn't you invest with your values?
In 2017, Morgan Stanley published their Sustainable Signals research paper examining demand for sustainable and responsible investments. They found that there is strong interest in responsible investing, particularly from millennials (86%) and from women investors (84%).
According to the Nuveen Responsible Investing Survey, 85% of investors believe that companies need to act now to mitigate the risks of climate change on their operations and 80% believe that companies are risking their future if they fail to plan for a low-carbon economy.
So who is investing responsibly? People just like you who care about the planet, care about your neighbor and want to make the world a better place.
Historically, investment analysts focused only on a company's numbers: how much money they make, their growth rate, etc. Those metrics are still valid, however a company's impact and operations are just as important. We believe that a positive portfolio, focusing on what we want to own and using Environmental, Social and Governance (ESG) metrics as our guide helps to produce a better, more forward looking and resilient portfolio for our clients.
Sustainable, responsible and impact investing has a storied history.
Follow the timeline below
In the mid 1700s, the Quakers asked the question if the slave trade was a viable industry. The answer, of course, was no, so the Quaker leadership forbade its members from engaging in any business activity that would benefit the slave trade
One of the founders of the Methodist Church, John Wesley, gave a sermon entitled "The Use of Money." In that sermon, he implored his parishoners to “not harm your neighbor through your business practices” and “avoid harmful chemicals that could compromise the health of workers.” He also introduced the idea of avoiding "sin stocks:" no guns liquor or tobacco.
1960s: The Vietnam War, the Civil Rights Movement, and equality for women broadened the investing field to include issues such as disarmament, fair labor, and the environment.
1970s: The interfaith Center on Corporate Responsibility files the first shareholder resolution opening the door to shareholder advocacy. Also, Congress passes the Community Reinvestment Act (CRA) which was designed to reduce discriminatory credit practices against low-income neighborhoods and to encourage commercial banks and savings associations to help meet the needs of borrowers in all segments of their communities.
1980s: Investors divest from companies doing business in South Africa to the tune of nearly $625 billion in an effort to put pressure on the Apartheid government and its human rights violations.
Sustainable, responsible and impact investing have become a mainstream investment strategy. Nearly major every investment manager offers some version of responsible investing.
2004: Peter Krull founds Krull & Company, dedicated to helping clients align their investments with their values TM.
2017: Krull & Company becomes a registered investment advisor and changes its name to Earth Equity Advisors.
2018: US SIF: The Forum for Sustainable & Responsible Investing publishes its semi-annual report which states that nearly $12 trillion is invested in a responsible manner in the United States - That's 1 in 4 dollars in total US assets under professional management!
2020: Earth Equity launches ALIGN to give all investors access to Sustainable, Responsible & Impact investment options.
