In this episode of The MarketBeat Podcast, Kate chats with guest David McNatt, executive vice president of Investment Solutions at AssetMark, an asset management platform. David is a specialist in ESG investing - which stands for investing with a focus on Environmental, Social and Corporate Governance concerns. David not only shares specifics about exactly what ESG investing is, but offers ways to avoid pitfalls and to understand exactly what kinds of companies you are buying, if you want to express your values or social concerns through your investments.
In this conversation, you will learn:
-Why it’s important to understand the distinctions between terms also used to describe ESG investing
-Ultimately, investors want to drive a positive impact relative to a specific objective
-How some investors can improve their financial outcome by incorporating ESG into their investing process
-How investors who want to express a specific mission-driven objective can incorporate ESG
-What ESG stands for: Environmental, Social and Corporate Governance, and how each of those areas of investment have different criteria
-Why some of the ESG metrics can be predictors of how a company may perform in the future
-Is an “exclusionary” approach to ESG investing the best way to allocate your portfolio?
-Why it’s important for investors to understand that ESG investing is still evolving, and there’s no single uniform definition
-What is “greenwashing” and why do investors need to be aware of this?
-What should investors look for, when trying to determine whether a stock’s actions and business is aligned with its stated ESG objectives? What are some signs to look for?
-How do you monitor ESG metrics among companies with operations or large parts of their revenue generated in emerging markets, where regulation and oversight may be less stringent
-Why it’s important not to make assumptions about ESG-rated companies, when even Tesla lost its ESG rating with Standard & Poor’s due to safety and working conditions in factories outside the U.S.
-Do you need to sacrifice return if you want to be an ESG investor?
-You don’t have to guess about performance: Over a 22-year period, ESG has provided a comparable or even slightly enhanced return
-Why institutional investors often have different objectives than an individual investor who is saving for retirement.
-If you have a very specific investment objective, that impact orientation narrows the list of companies you can invest in
-How does David suggest that you begin learning about ESG if you want to invest for a specific objective or to align your portfolio with your values
How to learn more about AssetMark:
https://www.assetmark.com/
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