Webinar in Review: Aligning your Values with your Investments

Contributed by: Clare Lilek Clare Lilek

In the investment world and in our conversations with clients, there has been a lot more talk about Socially Responsible Investing (SRI), Impact Investing, and Environment, Social, and Governance (ESG) based investing practices. But what does it all mean? Laurie Renchik, CFP®, partner and lead planner, and Angela Palacios, CFP®, Director of Investments, hosted a webinar on the blossoming social investing trend and how to align your values with your investments. Basically, how you can use your investment dollars to support and directly impact your social values in a sustainable long term approach without diminishing returns.

First, Angela described the difference between SRI, Impact, and ESG investing, which all get thrown around when talking about aligning your values with your investments. Check out the chart below for a quick, and helpful, recap on the various terms:

Currently, ESG Investing is the direction the market could be heading, which breaks down in Environment, Social, and Governance related factors. Social factors can include labor policy practices; governance looks at the diversity of leadership and point of view on company boards; and environment refers to the environmental impact a company’s production has. ESG is a lens through which to evaluate a company and is a positive screen to identify certain behaviors that not only align with particular investor values, but can also be a guide to help reduce costs and help to increase business (potentially less law suits, less environmental cleanup necessary, diverse boards creating better business practices, etc).

When attempting to align your values with your investing dollars, Laurie emphasized the importance of setting priorities. She suggests writing down your values and seeing where they most strongly lie, whether that is in social innovation, environmental stewardship, corporate governance, or perhaps a combination of all three. Once you prioritize your values, you and your financial planner can discuss risk potential and growth options to find a portfolio that most effectively aligns your interests with your ultimate financial goals. Taking a holistic approach to your social financial planning, by matching your financial goals with your social values, can be implemented more easily with the help of an Investment Policy Statement. Using an Investment Policy Statement can provide a blueprint for future investments and their trajectory, while simultaneously acting as a report card for past performance. Laurie reviewed a particular example to further explain the concept.

Overall, the webinar provided clarity for the various terms and definitions floating around for this blossoming social trend, while providing real tools for assessing sustainability and performance. For more information on this topic, please watch the entire webinar via the link below, and feel free to contact Angela or Laurie with specific questions or if you want help aligning your values with your investments.

Clare Lilek is a Challenge Detroit Fellow / Client Service Associate at Center for Financial Planning, Inc.

The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Laurie Renchik and Angela Palacios and not necessarily those of Raymond James. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Every investor's situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.