JUST Capital's Managing Director of Investor Solutions Lorraine Wilson spoke with Zachary Conway Founder and CEO of Seeds and Jon Hale, Global Head of Sustainability Research at Morningstar, to discuss what individuals wanting to invest sustainably should factor into their decisions and how advisors can help them navigate the growing ESG landscape.
Key Themes In the Discussion Were:
1. Ask How ESG funds earn their label
2. Pay attention to regulation and consolidation, but don’t wait for it to happen to invest
3. Align with financial advisors on values from the outset
While investors await regulation, Conway emphasized that financial advisors are a resource to help them discern different funds’ ESG methodology. For advisors to be most helpful, however, he made the point that they should be asking clients about their personal values, and how they want them to drive their investments, at the very start of their work together. He stressed that advisors need to recognize a values-driven approach to investing is the expectation their clients will have – rather than the exception.
“The industry is still thinking of it as this separate and distinct asset class that you sprinkle on top of larger asset allocation when your client asks for it,” Conway said. “This, in general, will be how investing is done going forward. Thinking as an advisor, your clients will need to opt out rather than opt in.”