Hive Financial believes that your investments can have a positive impact on the environment, society and the companies in which you invest in - while still pursuing competitive financial returns. One does not need to exclude the other. Not only does Sustainable Investing generate competitive investment returns, it can also be less volatile and more comprehensively analyze risk and reduce your overall risk. So you can do well, while doing good.
What is sustainable investing?
Sustainable investing is a strategy that combines personal values and investment goals with social and environmental impact. It considers ESG factors to pursue financial returns and societal impact.
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.
Motivations for sustainable investing include personal values, institutional mission, and client demands. Sustainable investors aim for strong financial performance and a positive impact on society and the environment. They may seek investments that provide societal benefits or assess ESG criteria to manage risk. Academic research has shown a link between ESG and financial performance. Different labels are used to describe sustainable investing, such as "community investing," "ethical investing," "green investing," "impact investing," and "socially responsible investing."
What strategies do sustainable investors use?
Sustainable investing involves considering environmental, social, and governance (ESG) criteria in investment decisions and portfolio construction. This strategy can include positive/best-in- class screening, negative/exclusionary screening, ESG integration, impact investing, and sustainability-themed investing. Community investing is a subset of sustainable investing that focuses on financing projects and institutions serving poor communities. Shareholder engagement, such as filing resolutions, is another aspect of sustainable investing for those with shares in public companies. This strategy aims to encourage responsible business practices and allocate capital for social and environmental benefit. Sustainable investing covers a wide range of products and asset classes, including stocks, cash, fixed income, private equity, venture capital, and real estate. Sustainable investors seek a competitive financial return, without sacrificing performance. Studies show that sustainable investing does not result in trade-offs between returns and social and environmental considerations, and can result in lower downside risk and more stability.
What is Shareholder Engagement?
Investors can raise ESG issues by filing or co-filing shareholder resolutions at US companies. These resolutions draw attention to important concerns, and can often result in productive discussions and agreements between the filers and management. From 2020 through the first half of 2022, 154 institutional investors and 70 investment managers collectively controlling a total of $3.0 trillion in assets at the start of 2022 filed or co-filed shareholder resolutions on ESG issues. Investors filed more than 750 resolutions relating to environmental, social, and governance issues for the 2022 proxy season. The leading issue raised in shareholder proposals, based on the number of proposals filed from 2020 through 2022, was on ensuring fair workplace practices, particularly on ending de facto discrimination based on ethnicity and sex. From 2020 through mid-2022, investors filed a total of 311 proposals on these fair labor issues. Investors also focused on disclosure and management of corporate political spending and lobbying. Shareholders filed 288 proposals on this subject during this period. Continuing a trend of several years, many of the targets were companies that have supported trade associations that oppose regulations to curb greenhouse gas emissions. In addition to filing resolutions, investors can actively vote, engage with the management, join shareholder coalitions, participate in policy initiatives, and report ESG investment issues to Congress.