Esg Investing: Ignore It And You'll Miss The Boat

ESG investing is a growing market, and ignoring it could be a big risk. Erika Karp, founder and chief executive of Cornerstone Capital, says that ESG investing is just investing done in more meticulous, conscious and deeply analytical ways. Brett Wayman, vice president of impact investing at Envestnet, agrees, saying that if you're not using ESG investing, you will be at a disadvantage. Dozens of ESG data providers are analysing and rating companies and funds, which means more work for financial advisers and investment managers.

ESG investing is just investing done in more meticulous, conscious and deeply analytical ways

Erika Karp, founder and chief executive of Cornerstone Capital, has said that ESG investing is just investing done in more meticulous, conscious and deeply analytical ways. Karp's view was echoed at the InvestmentNews ESG & Impact Forum at the United Nations in New York, where nearly two hundred financial advisers and investment managers gathered to discuss the investment opportunities in this broad and growing market.

Brett Wayman, vice president of impact investing at Envestnet, agreed, saying that if you're not using ESG as a lens on top of traditional investments, you will be at a disadvantage.

Wayman also said that just because the ESG research data is not yet perfect, it's no reason to bypass it. He added that financial advisers and investment managers should find a data set and know what each data provider and data set means.

Hendrik Bartel, chief executive, added that it's important to keep in mind that ESG is not one umbrella, there are many ways of reaching your clients' objectives. He also warned against "green-washed products".

ESG is another lens on top of traditional investments

ESG investing is a meticulous, conscious and deeply analytical way of investing that takes into account environmental, social and governance factors. It is not a separate type of investing, but rather another lens on top of traditional investments.

Brett Wayman, vice president of impact investing at Envestnet, says that if you're not using ESG as a lens, you will be at a disadvantage. Wayman also points out that just because the ESG research data is not yet perfect, it's no reason to bypass it. He advises financial advisers to find a data set and know what each data provider and data set means.

Nathalie Wallace, global head of ESG investment strategy at State Street Global Advisors, agrees, saying that financial advisers and investment managers need to do in-depth research and read the prospectus.

Hendrik Bartel, chief executive, adds that there is a movement coming from Europe to better define ESG and promote better standards. He warns against "green-washed products" and says that there are many ways of reaching clients' objectives.

ESG research data is not yet perfect, but it's no reason to bypass it

ESG (environmental, social and governance) investing is a growing market. However, some investors are still unsure about how to approach it. Erika Karp, founder and chief executive of Cornerstone Capital, says that ESG investing is just investing done in more meticulous, conscious and deeply analytical ways. She adds that the biggest risk when it comes to ESG investing might be ignoring it.

Brett Wayman, vice president of impact investing at Envestnet, agrees. He says that ESG should be thought of as another lens on top of traditional investments, and if you're not using it, you will be at a disadvantage. Wayman also points out that just because the ESG research data is not yet perfect, it's no reason to bypass it. He advises finding a data set and knowing what each data provider and data set means.

Hendrik Bartel, chief executive, adds that there is a movement coming from Europe to better define ESG, and there are better standards being promoted. He warns investors to keep an eye out for "green-washed products". Nathalie Wallace, global head of ESG investment strategy at State Street Global Advisors, agrees that investors should do their research.

The InvestmentNews ESG & Impact Forum in New York featured 10 short documentaries focused on many of the U.N.'s sustainable development goals. It's clear that ESG investing is an important topic that investors need to pay attention to. By ignoring it, they may be missing out on important investment opportunities.

Watch out for green-washed products

When it comes to ESG investing, the biggest risk might be ignoring the space. Erika Karp, founder and chief executive of Cornerstone Capital, said: "It's not ESG investing, it's just investing done in more meticulous, conscious and deeply analytical ways."

Brett Wayman, vice president of impact investing at Envestnet, added: "Think of ESG as another lens on top of traditional investments, and if you're not using it, you will be at a disadvantage."

Hendrik Bartel, chief executive, said: "There is a movement coming from Europe to better define ESG, and there are better standards being promoted. Keep in mind that ESG is not one umbrella, there are many ways of reaching your clients' objectives."

Nathalie Wallace, global head of ESG investment strategy at State Street Global Advisors, said: "Read the prospectus; we all have to do that in-depth research."

When it comes to ESG investing, it is important to be aware of the risk of greenwashing. Greenwashing is when a company or organisation presents itself as being more environmentally friendly or sustainable than it actually is. This can be done through misleading advertising, branding, or marketing. For example, a company might claim to be "green" or "eco-friendly" without providing any evidence or data to support these claims.

To avoid greenwashing, it is important to do your research and due diligence. This includes reading prospectuses and other documents, as well as understanding the ESG data and ratings. It is also important to consider the different ways of reaching your clients' objectives and to be aware of the standards and definitions of ESG. By doing so, you can make more informed and conscious investment decisions.

ESG is not one umbrella, there are many ways of reaching your clients' objectives

When it comes to ESG investing, the biggest risk is ignoring it. Erika Karp, founder and chief executive of Cornerstone Capital, says that ESG investing is just investing done in more meticulous, conscious and deeply analytical ways. In other words, ESG is not one umbrella, there are many ways of reaching your clients' objectives.

Brett Wayman, vice president of impact investing at Envestnet, agrees. He says that ESG should be thought of as another lens on top of traditional investments, and if you're not using it, you will be at a disadvantage.

Hendrik Bartel, chief executive, adds that it's important to keep in mind that there are better standards being promoted. Bartel warns that one of the key risks of ESG investing is the prevalence of "green-washed products".

Wayman also highlights the importance of not bypassing ESG research data just because it's not yet perfect. He advises financial advisers and investment managers to find a data set and know what each data provider and data set means. This means more work for them, but it's necessary to make sense of ESG ratings. Nathalie Wallace, global head of ESG investment strategy at State Street Global Advisors, agrees, saying that in-depth research is key.

Frequently asked questions