Sustainable Investing

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Bloomberg Businessweek published a report this week outlining the problem with ESG investing. It’s a lengthy analysis with lots of facts and figures, so I thought it would be worthwhile to summarize its major findings.

Dig deeper → 2 min

Meet MSCI: the ESG matchmaker

MSCI is the world’s premier ratings company for environmental, social and governance (ESG) designations. It’s the ESG equivalent of Moody’s for insurance ratings.

MSCI has become the de-facto standard for smacking “sustainable” on any investment fund. The impact of sustainable investing has suffered as a result.

What’s the problem with MSCI ESG ratings?

According to Bloomberg’s report, MSCI ratings don’t accurately measure the impact of a company on the Earth. Rather, their ratings measure the impact of the Earth on a company.

It’s a powerful distinction that has damning effects on the real-world impact of ESG ratings. And it’s a method that MSCI openly boasts as a logical indication for relevant stakeholders.… Read the rest

  1. Better Markets
  2. Business
  3. Profit

What to know Sustainable investing allows you to implement your core values while increasing your profits. ETFs, Index Funds, and Roboadvisors are a good place to start.

Four main approaches

  • Exclusionary screening - avoiding investment in companies or sectors that do not align with investor values.
  • ESG integration - rating companies based on their implementation of Environmental, Social and Governance principles.
  • Thematic investing - focusing investments according to interest in specific themes, for example clean energy.
  • Impact investing - investing in companies or funds with the intention of generating impact alongside a financial return.

Bottom line -- Sustainable investing not only offers you a way to invest according to your values, but it also provides good financial performance and potential risk mitigation.

Dig deeper —> 5 min

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