A growing number of investors are choosing to put their money where their morals are, investing in companies that align with their values. This responsible investment approach is also known as sustainable investing or ESG investing. At Wells Fargo Private Bank, we call our approach Social Impact Investing.
Social Impact Investing seeks the potential for competitive investment returns, but does so with the twin goals of aligning portfolios with client values and creating a positive impact in society.
The sector has taken off in recent years, growing fourteenfold since 1995 and 33 percent from 2014 to 2016, according to a report by US SIF Foundation, an industry group that advocates for sustainable investing. About $8.72 trillion in assets under management in the U.S. use responsible strategies, the report says.
“Clients always want to know whether responsible investing will impact performance, and the truth is that, while you can’t predict future performance based on historical results, the performance of these strategies has been at par or above the S&P Global 1200 from 2014 to 2018 according to the S&P Global 1200 ESG Factor Weighted Index,” says Lloyd Kurtz, Senior Portfolio Manager and Head of Social Impact Investing at Wells Fargo Private Bank. Kurtz adds, you should also figure out what connects with you.