Advisers should speak to clients about ESG investments
Financial advisers and investors should learn to talk comfortably about responsible investing and the principles behind it in order to help meet their client needs, according to Calvert Research Management, an affiliate of Eaton Vance.
The firm said that despite of the apparent investor interest, starting a conversation about responsible investing with clients might be difficult for some financial advisers.
According to Calvert Research’s president and chief executive, John Streur, it would be essential for both advisers and investors to get on the same page in constructing a portfolio that would meet risk-return goals and, at the same time, address investor concerns about environmental, social and governance (ESG) issues.
“As responsible investing draws more interest in the marketplace, many financial advisers need deeper education to become more comfortable talking about it with their clients,” he said.
Calvert, which said it sought to invest in issuers that balanced the needs of financial and non-financial stakeholders, aimed to identify companies that operated in a manner that was consistent with:
- Environmental sustainability and resource efficiency
- Equitable societies and respect for human rights; and
- Accountable governance and transparency.
Based on that, Calvert identified four pillars to form an acceptable responsible investment strategy:
- Performance: responsibility to seek strong portfolio returns
- Research: conduct deep, proprietary research focused on material ESG issues
- Engagement: engage with companies to help drive performance and social value; and
- Impact: the impact of the investments should be material and measurable.
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