ESG Investing in Colorado Springs
Today’s investors are looking for more than outstanding returns. They also want to know that their investments are working towards creating a better world for all of us. As an evolution of socially responsible investing, ESG Investing gives those investors a way to align their investments with their core values in a way that has never before been possible.
ESG Investing Explained
ESG investing stands for environmental, social, and governance investing. Those are the three components that many of today’s investors believe are essential elements of creating positive change.
The environmental component of ESG investing addresses a company’s approach to environmental issues like climate change, pollution, deforestation, waste management, energy efficiency, and water scarcity.
ESG investing also includes a social component, which focuses on a company’s approach to addressing social issues like racial justice, LGBTQ+ equality, human rights, and community relations.
Then there is the governance component, which evaluates how a company handles governance issues like board member diversity, executive pay, lobbying, and political contributions.
There are several research agencies that dig into how a publicly traded company handles each of these issues and ranks them accordingly. This research provides investors with an easy way to gauge exactly how much a particular company is doing to create positive change.
Benefits of ESG Investing
The primary benefit of ESG investing is that it allows investors to completely align their investment dollars with their core beliefs. Depending on what you are most passionate about, our ESG financial advisors in Colorado Springs will give you the opportunity to target your investments in the area.
Another benefit of ESG investing is that there is not much downside involved. Companies that rank favorable on various ESG metrics tend to hold up better when the market is struggling, so focusing your investments here can often offer better performance than the broad market during difficult periods.
It is also worth noting that highly rated ESG companies are often the same companies that are creating positive change in the lives of consumers and reaping the rewards of that change through increased stock prices. With this in mind, it is entirely possible for an ESG-focused portfolio to outperform the general market. One final benefit of ESG investing that often gets overlooked is that by investing in highly-rated ESG companies, investors are actively avoiding putting their funds to work supporting the companies that aren’t working to create positive change.
ESG Investing with Dodds Wealth
ESG investing can be put into action for individual investors by targeting highly rated ESG companies, or through various mutual funds and ETFs that make it easy to invest in a basket of these companies. However, there is simply no substitute for having an advisor with a wealth of experience in your corner. Here at Dodds Wealth, we have extensive experience helping clients with ESG investing in Colorado Springs. Having a personal advisor work with you to put together the best financial plan for your ESG investing strategy can provide more value than any robo-advisors can offer.
Contact us today to start the process, and let’s put together a plan to keep your financial future secure regardless of what happens in the market.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results.
Socially Responsible Investing (SRI) / Environmental Social Governance (ESG) investing has certain risks based on the fact that the criteria excludes securities of certain issuers for non-financial reasons and, therefore, investors may forgo some market opportunities and the universe of investments available will be smaller.