Smarter investing strategies
As wealth managers, we integrate key performance metrics of environmental sustainability, social, and governance (ESG) criteria in our client portfolios alongside financial performance.
We believe that integrating ESG data in the investment process can help identify companies positioned to deliver solid long-term investment performance. We aim to offer competitive financial returns while helping leverage the power of your investment to create concrete positive social and environmental change. We seek to achieve this through an integrated approach that includes shareholder advocacy, community investing, proxy voting, and public policy involvement as strategies for sustainable, responsible, impact investing.
Example: You want to consider the human rights practices and environmental sustainability practices of the companies you're invested in. To maintain a diversified portfolio, you invest in companies that are not perfect but have better qualities than others in their industry and are moving in the right direction.
"In our research, we ask companies questions that they are not used to being asked, about issues that they've never before been told are important. In the U.S. and increasingly in Western Europe, simply putting issues on the table can positively affect management's decision making." Amy Domini, Summer 2007 GreenMoneyJournal.com.
When your professional money management is engaged in each of the following key strategies, you're doing a lot more than simply screening out some particular companies or industries. You're taking advantage of what we believe to be a smarter investing approach.
Shareowner engagement with portfolio companies
Our clients want us to use their shareholder power to support their worldview and advance their mission.
More corporate executives and trustees are finding value in working alongside sustainability responsibility minded investors to gain a better understanding of the business benefits and risks surrounding climate change, workplace safety and indigenous peoples rights, and other important timely issues.
Our portfolio managers and analysts work in coalition with other investors and stakeholders to lead these conversations and campaigns. We choose to work with this select group of financial partners because they are effectively exercising their right to engage with the public companies in our portfolios.
Shareowners can file a resolution to draw attention to a needed change in corporate policies, practices, or transparency. These resolutions encourage measurement of environmental impact, supply chain oversight, or board diversity for example. What gets measured, gets managed so it is important for companies to understand their impact before they can begin taking steps to reduce or improve it.
Anyone who owns $2,000 worth of a stock for one year consecutively has the right to file a resolution. This does not guarantee the resolution will make it to the proxy ballot nor does it mean that the vote would be binding, but filing resolutions can be an effective engagement tool used by most of the money managers we partner with.
Example: Our money manager files a resolution for all shareowners to vote on asking a company to report their global labor standards publicly to shareowners, or to phase out selling unsustainably harvested old-growth lumber.
Shareowner campaigns for tighter supplier oversight have resulted in changes at Nike, Wal-Mart, and Disney. A Disney shareholder proposal won 43% support--making sweeping changes to the way it monitors, audits, and reports on contractors. Gap is releasing more information on overseas contractor compliance.
Contact us if you might be interested in a review of your current shareholder engagement strategy or would just like to discuss this topic.
Our portfolio manager proxy voting policies seek to pressure management at publicly traded companies to improve their environmental, social, and governance policies. We believe this helps make for a better a company and can therefore help protect long-term shareowner value. Good proxy voting policy put into practice can support your values and help align a foundation’s investments with their charitable mission.
Example: A young couple was a long-term welfare recipient. They turned to his woodworking hobby for help. With the help of a small loan from a community loan fund they were able to turn his woodworking into a business that now supports the whole family.
You can now make small business, child care, and affordable housing a portion of your portfolio by investing in professionally-managed community investment funds and notes. Our office is participating in the 1% for community campaign and we build this in to most portfolios.
Better managing risk
Appropriate asset allocation (a portfolio's mix of asset classes and diversification) can help manage investment risk. This is one of the most important factors in the risk and performance of a portfolio. Your professionally managed portfolio should utilize sophisticated asset allocation strategies and have an appropriately diversified mix of investments reflecting your objectives, time frame, risk tolerance, and cash flow needs.
A great time to join the movement!
It is a great time to be a smart engaged strategic investor. These effective investment strategies are evolved and are being utilized by more serious yet caring investors. At Goodfunds Wealth Management™ we believe that by integrating ESG criteria in portfolio management, shareowner engagement implemented through active proxy-voting, investor engagement and resolutions, and community investing, we can have a better investment experience on many levels.