{"id":5059,"date":"2019-08-12T17:21:05","date_gmt":"2019-08-12T17:21:05","guid":{"rendered":"https:\/\/investingcounterpoint.com\/?p=5059"},"modified":"2020-09-04T08:47:47","modified_gmt":"2020-09-04T13:47:47","slug":"are-you-capitalizing-on-growing-esg-popularity","status":"publish","type":"post","link":"https:\/\/rixtrema.com\/blog\/are-you-capitalizing-on-growing-esg-popularity\/","title":{"rendered":"Are You Capitalizing On Growing ESG-investing Popularity"},"content":{"rendered":"\n \r\n
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  1. What is ESG? <\/a><\/li>\r\n \t
  2. Trendy, but Who Cares?<\/a><\/li>\r\n \t
  3. Advisors are Missing the ESG Market. <\/a><\/li>\r\n \t
  4. How Do Advisors Attract ESG Clients?<\/a><\/li>\r\n<\/ol>\n\n\n\n

    We all can become complacent in our work at times. As daily tasks pile up, we spend our working days simply addressing the next appointment or putting out small fires as they appear. Yet, this clouds our vision of the future and we can miss opportunities for growth, get trapped in a fixed mindset and stagnate. Calvert Investing\u2019s Investment News Research<\/a> <\/em>shows that advisors are aware of the growing popularity of socially responsible investing but not taking action to capture the market.<\/p><\/p>\n\n\n\n

    What is ESG?<\/strong><\/h2>\n\n\n\n

    The Environmental Social Government (ESG) market, especially, is still up for grabs. Yet, it often gets lumped underneath the ethical investing umbrella despite being very distinct in advantageous ways. Socially Responsible Investing uses negative screens that could leave a portfolio overexposed to certain economic industries. ESG investing, however, searches throughout all sectors to find companies that meet environmental, social, and governmental principles. These positive screens make ESG investing more competitive than other ethical investing methods because it more closely matches the market while minimizing the downside volatility risk of investing in indices.<\/p><\/p>\n\n\n\n

    Trendy, but Who Cares?<\/strong><\/h2>\n\n\n\n

    Millennials are not the only ones concerned with the impact of their investments but only half of millennials<\/a> said they would trust a robo-advisor. Just this month, Swell, a promising digital advice platform offering sustainable-themed portfolios, closed because it could not reach scale by attracting millennials. 30% of Gen Xers (1961-1981), though, are interested in ESG strategies and increasingly prefer to manage investments through advisors than with online ethical investing tools or with a DIY approach. Furthermore, the opportunity is available for advisors who target any wealth group. 25% of mass affluent investors and 31% of ultra-high-net-worth investors express high interest.<\/p><\/p>\n\n\n\n

    \"25%<\/a>
    25% of mass affluent investors and 31% of ultra-high-net-worth investors express high interest.<\/figcaption><\/figure>\n\n\n\n

    Advisors are Missing the ESG Market<\/strong><\/h2>\n\n\n\n

    If those numbers do\u00a0not scream opportunity, then perhaps these will: 32% of advisors use ESG to attract new clients; 25% use it to create a business niche; and only 44% consider ESG when constructing portfolios. Lastly, 84% of advisors say ESG\u00a0issues are important to their clients, up from 73% in 2017. Best of all,\u00a0advisors control the means to build a competitive advantage to capture ESG\u00a0clients in their area.<\/p>\r\n

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    Investors look for\u00a0advisors because they want to set a strategy, forget it, and benefit from the\u00a0peace of mind from knowing their financial future is solid. Calvert suggests\u00a0that investors have the interest but lack the knowledge to pursue ESG investing\u00a0on their own. Investors struggle to evaluate performance of ESG funds compared\u00a0to traditional investing strategies. They also lack the resources to research\u00a0their own investment opportunity or simply believe that there is a limited\u00a0field of possible ESG investment options.<\/p>\r\n

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    Advisors should be\u00a0aware that the opportunity for investing by ESG principles has never been\u00a0better. Investing\r\nCounterpoint<\/a><\/em> covered the IPO of a promising company, Beyond Meat<\/a>, providing alternative\u00a0animal-free protein products. Morningstar data<\/a> shows that ESG\u00a0Funds attracted $8.9 billion in the first six months of 2019 alone. Funds now attract investors by orienting their\u00a0impact goal around specific ESG issues – climate change, clean technology, and\u00a0emissions and waste management are the most popular among investors.<\/p>\r\n

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    How Do Advisors Attract ESG Clients?<\/strong><\/h2>\r\n

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