We believe it is possible to do good while also doing well.

Ever wish you could leverage your wealth to do good in the world? Many of us have this desire but are also concerned with maintaining our own financial security. Fortunately, there is now a way to invest your wealth in alignment with your values – while continuing to earn the returns to which you’ve become accustomed. It is called ESG investing and it is available to you here at Stearns Financial Group.

ESG INVESTING

ESG stands for Environmental, Social, and Governance, a type of investing that allows you to invest in companies whose behaviors align with your own personal values.

The Kinds of Issues You Can Impact with your Portfolio

Environmental

Deforestation
Waste and Pollution
Resource Depletion
Greenhouse Gas Emission
Climate Change

Social

Conflict
Health and Safety
Employee Relations and Diversity
Working Conditions (including child labor and slavery)
Local Communities (e.g., explicitly fund projects or institutions that will serve poor and underserved communities)

Governance

Tax Strategy
Corruption and Bribery
Executive Remuneration
Donations and Political Lobbying
Board Diversity and Structure

ESG Investing is Good Investing

We believe an integrated portfolio – one that considers ESG factors in addition to traditional fundamental metrics – can deliver comparable financial performance while simultaneously having a positive impact on the world.

There is also increasing evidence that incorporating ESG analysis can play an important role in reducing portfolio risk. In its initial iterations, values-based investing was often associated with lower returns. Fortunately, this is no longer the case.

Increasingly, investors and consumers alike are recognizing that good corporate behavior not only positively impacts society, but also shareholder value.

"The American dream is alive, but fraying. Major employers are investing in their workers and communities because they know it is the only way to be successful over the long term. These modernized principles reflect the business community’s unwavering commitment to continue to push for an economy that serves all Americans."

Jamie Dimon, Chairman and CEO of JPMorgan
Chase & Co. and Chairman of Business Roundtable

The idea that one can do good while also doing well is not an unsubstantiated claim. In fact, a meta-study of over 2200 studies has shown that ESG returns have equaled or exceeded those of non-ESG portfolios 90% of the time.

ESG Investing Reduces Portfolio Risk

In our ever-expanding world of social media and instantaneous sound bites, companies risk losing significant shareholder value if they do not pay attention to issues such as: corporate transparency, gender parity, racial inclusion, the health and well-being of their employees, the safety of their consumers, and their carbon footprint.

Simply put, consumers and investors are increasingly unwilling to tolerate corporate behaviors that negatively impact their communities. As a result, what might be deemed “bad behavior” can easily go viral, causing not only reputational damage but financial harm. Recent examples of this phenomenon include the emissions scandal at Volkswagen, the security breach at Equifax and the false account openings at Wells Fargo. Each of these events could have been avoided with better corporate governance; and in each instance, shareholders would have saved millions of dollars in value. It is worth noting that each of these companies were downgraded by ESG ratings agencies up to two years prior to the scandals that emerged. We can therefore extrapolate that good corporate behavior strengthens a company’s long-term sustainability, enhancing shareholder value.

STEPS TO ESG INVESTING

Stearns Build Your Nest Egg Img

Build Your Nest Egg

ESG doesn't require that you give more of your money away or that you put your financial future in jeopardy to make a difference.

Stearns Impact the World Img

Impact the World

ESG opts-in to companies that are making positive impacts in the three factor areas, so you can align your investments with your values.

Stearns Embrace the Strategy

Embrace the Strategy

ESG is not new, but it has evolved and is moving to the forefront of decision-making for investors around the globe.

QUESTIONS YOU MAY HAVE:

  • How can my portfolio maintain financial performance with ESG investments?

  • Am I putting my financial security at risk by considering ESG factors?

  • How can I be sure an ESG strategy addresses issues important to me?

  • Is ESG just a fad for liberal individuals and millennials?

RESOURCES FOR ESG INVESTING

HOW EVER YOUR LIFE HAPPENS, WE’RE HERE FOR YOU...

Living a life that aligns with your values is often considered one of the defining hallmarks of success. We therefore invite you to consider ESG investing in your portfolio and are prepared to help you throughout the process. If not, be assured that our traditional investment strategies remain an integral part of our core offerings at SFG.