Description
Build sustainable, responsible portfolios that reflect the values of your retail clients
In The Sustainable Investor: Responsible, Impactful, and Values-Driven Investing Strategies and Practices for Financial Professionals, the Founder and Director of Sustainable Investing at Earth Equity Advisors, Peter Krull, delivers a timely and insightful discussion of sustainable investing and responsible portfolio construction. In the book, you'll learn how to help your retail clients build solutions-based, sustainable, responsible, and impact-driven portfolios that actually reflect their values. You'll also learn how to avoid the greenwashed, “less-bad” investments so commonly found in the products and portfolios of major Wall Street firms seeking to use ESG primarily as a growth vehicle.
The book also offers:
- A history of the Socially Responsible Investing movement, including its descendants: Environmental, Social, and Governance (ESG) Investing and Sustainable, Responsible, and Impact (SRI) Investing
- Why labels like ESG and SRI matter, what they mean, and how they're different
- An explanation of how major Wall Street firms hijacked the ESG investing philosophy and turned it into a vehicle for asset accumulation
A perfect resource for financial advisors, planners, and other finance professionals, The Sustainable Investor is the ideal roadmap to values-driven investing strategies that meets the needs of retail investors who seek to make a positive difference in the world with their money.
Table of Contents
Foreword by Ed Begley Jr. xv
Introduction: Why I’m Qualified to Write About Sri xxi
Section I The Basics 1
Chapter 1 Why You Need to Know About Sri Now 3
Overview 3
Climate Change Hitting Home 5
Income Inequality and Social Justice in the Headlines 11
Corporate Greed and Malfeasance 13
More Information Available 15
Demographic Shifts 16
The Great Wealth Transfer 18
The Changing Economy 19
Conclusion 23
Chapter 2 The History of Sri, Esg, and Whatever the Next Acronym Might Be 25
Overview 25
Faith- Based Investing 26
Peace, Love, and Environmentalism 29
South African Apartheid 30
The Different Iterations of SRI 32
And Speaking of ESG 33
Where We’re Going 35
Chapter 3 Esg: a Set of Metrics 37
Overview 37
What Is ESG? 38
ESG Is About Risk 39
ESG Reporting and Its Advantages 41
Regulation 43
E is for Environment 45
S is for Social 47
G is for Governance 49
Why Transparency Matters 52
ESG is the Future of Investing 53
Chapter 4 Sustainable Investing: Making the World A Better Place 55
Sustainable Investing and the Clean, Resilient Economy 55
What Does Positive, Solutions- Based Investing Mean? 56
What Is Decarbonization? 61
Where Does Banking Fit In? 62
Resilience and Adaptation: The Hidden Key to Sustainable Investing and the Clean Economy 66
The United Nations SDGs 72
Indexing and Sustainable Investing 74
Sustainable Investing Is Growth Investing 75
ESG Investing Is NOT Sustainable Investing 76
Measuring, Reporting, and Transparency 77
Conclusion 86
Chapter 5 Greenwashing 87
Overview 87
Greenwashing and Your Clients 88
Case Study 89
Conclusion 96
Chapter 6 Shareholder Advocacy 97
Overview 97
The Rules 99
Teamwork Is Key 99
The Issues 101
Examples of Shareholder Advocacy Victories 103
Engagement 104
Conclusion 106
Chapter 7 Community, Impact, and Private Investing 107
Overview 107
Community and Impact Investing 108
Private Investments 113
Conclusion 119
Section II Investing 121
Chapter 8 The Institutional Versus Retail Investor Dilemma 123
Overview 123
The Institutional Investor 124
The Retail Investor 126
What Does the Retail Investor Want? 126
Conclusion 127
Chapter 9 Fiduciary Duty and Performance 129
Overview 129
ESG as Fiduciary Duty? 131
SRI or Sustainable, Resilient, and Innovative Investing and Fiduciary Duty 133
Performance 134
Conclusion 137
Chapter 10 Bringing It All Together: Constructing Your First Sri Portfolio 139
Overview 139
The Holdings Make the Difference 140
Divesting from Fossil Fuels Isn’t Just About Risk, It’s About Performance, Too 143
Modern Portfolio Theory Still Applies 145
Targeting Specific Opportunities: Thematics 147
Avoiding the Crossover Trap 153
What About Bonds? 155
Alternatives 158
Asset Allocation 163
Strategic Versus Tactical Management 167
Being an Investment Manager 169
Chapter 11 An Individual Stock Portfolio: How I Run The Green Sage Sustainability Portfolio 171
Overview 172
It’s All In the Universe 173
Portfolio Attributes 180
Portfolio Holdings Examples 183
More About the Universe 187
Data, Data, Data 189
Conclusion 193
Chapter 12 Financial Planning 195
Overview 195
Climate Change and Financial Planning 196
Location, Location, Location 197
Insurance 198
Banking 200
Water and Drought 201
Income Interruptions 201
Inflationary Pressures 203
$500,000 204
Conclusion 205
Chapter 13 Business Retirement Plans 207
Overview 207
Hot Potato 209
What’s the Best Way to Add Sustainable Fund(s) to a Plan? 212
Conclusion 213
Section III For the Investment Advisor 215
Chapter 14 The Sri Practice: How You Can Build Your Own 217
Overview 217
Green or Gray? 219
Start with Why 220
Communicating with Clients and Prospects 222
Working with Values- Based Clients 225
Crafting Your Practice 226
Organizations 229
Independent or Working Within a Larger SRI Firm or a Larger non- SRI Firm? 230
Conclusion 231
Chapter 15 Dealing with the Politics of Sri 233
Overview 233
Woke Investing and Disinformation 234
In Practice 240
Understand the Criticisms 241
Be a Thought Leader 242
Chapter 16 The Wrap- Up 243
Acknowledgments 247
Resources 251
Index 257
