December Newsletter: Investing for a Better World

December 06, 2021 | Hicks Wealth Team


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“Responsible investing” is not new, but it’s become a movement that’s gathering momentum around the world.

As nations came together at COP26 in Glasgow to work toward a low carbon future, investors took notice. Many of them are using their financial clout to put pressure on companies to move from fossil fuels to renewable energy.
“Responsible investing” is not new, but it’s become a movement that’s gathering momentum around the world. We, too, find that many of our clients are
looking to invest in companies that align with their values. There are three underlying strategies for responsible investing:

  1. Withdrawing support – Under this strategy, also known as SRI (socially responsible investing) investors avoid companies that are involved in products such as fossil fuels, weapons, gambling, tobacco, and alcohol.
  2. Impact investing - Some investments have a direct impact on the environment or social issues. Examples are a solar farm or affordable  housing. Currently, impact investing is mostly done in private markets. But as these companies become profitable they will move into the public sphere.
  3. Sustainable investing – Often referred to as ESG (environmental, social, and governance), this type of investing is growing rapidly. RBC is doing a lot of work to develop criteria for companies to meet the standards of ESG. We already have a number of solutions and strategies for investors seeking guidance in this area.

During this season of giving, we often think of how we can use our assets for charitable purposes. Responsible investing offers us another way to do good with our money.
As responsible investing becomes more popular, it’s also getting more complicated. It’s important that a responsible investment initiative aligns with your financial goals and objectives, and your tolerance for risk. This is where we can help. We will talk more about this area in future issues of this newsletter, but if you’d like more information, please give us a call.