Highlights

  • Investors with an ESG (environmental, social, governance) focus may feel like they’re house hunting: trying to match what’s important to them with what’s currently on the market.
  • With ESG factors taking on different importance to investors and asset managers, it can be difficult to find a perfect fit.
  • This paper introduces three potential solutions for ESG investing: buy a pre-packaged model portfolio, renovate an existing portfolio by replacing selected investments, or build a new portfolio from the ground up.
  • As growing social awareness drives demand for ESG investments, astute investors, like astute homebuyers, will want to find the best way to align their portfolios with their personal values.
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Sustainable investing focuses on investments in companies that relate to certain sustainable development themes and demonstrate adherence to environmental, social and governance (ESG) practices; therefore the universe of investments may be limited and investors may not be able to take advantage of the same opportunities or market trends as investors that do not use such criteria. This could have a negative impact on an investor’s overall performance depending on whether such investments are in or out of favor.

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