Thursday, June 27, 2019

Invest in What Matters

When seeking the ability to align financial goals with personal values and social concerns that are important, social impact investing (SII) may be a consideration for a portfolio. “Socially responsible”; “sustainable”; “values-based”; “ethical”; “green”; and “environmental, social governance (ESG) and impact” are some of the many terms commonly used to describe social impact investing.

While the goals are generally the same—to generate measureable social and environmental impact along with financial returns—the strategies vary in approach. By combining traditional socially responsible exclusions with a disciplined analysis of ESG factors, Wells Fargo has developed an integrated approach to social impact investing.

Gaining in Popularity

Over the past 20 years, there have been big changes in the investment industry. One of the most significant has been the growth of social impact investing. Traditionally known as socially responsible investing, this approach excluded so-called “sin stocks” (alcohol, tobacco, weapons manufacturing, adult entertainment, gambling) from investment portfolios. It has expanded to proactively seek best-in-class companies that incorporate strong ESG policies into their business practices.

Invest in Issues That Are Important

Does one have concerns about the environment or human rights? Is one interested in supporting the ethical treatment of animals, or does one simply wish to avoid investing in companies whose business practices are in conflict with personal beliefs?

Wells Fargo offers a range of choices to invest in companies whose policies and practices are compatible with what matters most. Wells Fargo Advisors can help build a portfolio based on research, analysis and products that align with individual investment goals and philosophy, and avoid selecting companies with poor ESG performance or those that conflict with a client’s philosophy.

Keep in mind, however, that all investing involves risk, including the possible loss of principal. A strategy’s social policy could cause it to forgo opportunities to gain exposure to certain industries, companies, sectors or regions of the economy that could cause it to underperform similar portfolios that do not have a social policy. A socially responsible investing style may shift in and out of favor.

Contact a financial advisor for more information on how to incorporate social impact investing into investment planning.

This article was written by/for Wells Fargo Advisors and provided courtesy of William Looney, CRPC, financial advisor, in Edmond. For more information, call 405-923-5985.

Investments in securities and insurance products are: NOT FDIC-INSURED/NOT BANK-GUARANTEED/MAY LOSE VALUE

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC, Member SIPC, a registered broker-dealer and non-bank affiliate of Wells Fargo & Company.

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