Investing Sustainably with Wilkinson Wealth Management

Discovering Your Goals and Objectives

An asset allocation strategy that is tailored to your investment objective is central to helping you pursue your long-term goals. If sustainable investing—also sometimes referred to as Environmental, Social, and Governance (ESG) investing—is one of your objectives, we will incorporate it as part of our four-step investment process. ESG investing provides a powerful value proposition: enabling you to do good for the world while also doing well financially.

Driven by your desire to build wealth responsibly, we will clearly define which particular ESG issues matter most to you. After discovering your specific sustainability objectives, we will build an investment strategy, implement your portfolio, and review and monitor its performance with your sustainability focus in mind. There are multiple methodologies for selecting sustainable investments, so as part of building your strategy, we will uncover which methodology best aligns with your motivations for sustainable investing.

Sustainable/ESG Methodologies

Understanding why you want to invest in a socially responsible portfolio is essential for selecting sustainable investment methodologies appropriate for your objectives. Some of the most common methodologies that we will consider include:  

Negative screening excludes investments in companies or industries based on the given sustainable criteria. For example, a negative screening methodology might exclude investments in any companies that are involved in the production of tobacco.

Positive screening selects securities based on a defined threshold for sustainable performance relative to the company’s industry peers. So, within the financial industry, you might only invest in companies that perform better than 50% of their financial industry peers on sustainability metrics.

Thematic or impact investing involves investing in companies that are specifically focused on certain sustainable outcomes, such as renewable energy, improvements for society’s healthcare or education, or sustainable agriculture, as well as generating a financial return.

ESG integration is a methodology that systematically and explicitly considers ESG factors as part of the investment due diligence and financial analysis process. With this methodology, while ESG might not be the primary goal, it is a consideration for selecting investments that might have better risk/reward ratios and less volatility specifically because of sustainable practices.

Investing involves risks including possible loss of principal. Environmental, social and governance (ESG) funds are subject to the risk of underperforming the broader equity market or other funds that do not utilize ESG criteria.

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