Responsible Investing Spectrum
By: Michael Carbone, CFA, CFP®
Responsible investing is a broad term used to describe the different approaches used to incorporate environmental, social or governance (ESG) issues into an investment portfolio.
Although the general goal of responsible investment is known to many – there are different ways to implement ESG issues into an investment process. In order to better understand these approaches, I believe it’s helpful to consider the investor’s objective on a spectrum:
On one end of the spectrum, investors are primarily focused on investing their money, while generally being aware of how their investments are connected to certain ESG issues. They may choose to integrate these issues into their investment decision process.
The other end the spectrum consists of those seeking to make an impact first. These investors may be less concerned with investment returns – so long as their dollars are being used to generate positive outcomes for society or the environment.
As the investor moves along the spectrum, they may become more willing to accept uncertainty by reducing the diversification of their portfolio. The investor may exclude companies or sectors that don’t align with their values or invest thematically to address specific issues.
It’s important to understand that there are no right or wrong approaches to responsible investing – everyone’s situation is different. I believe that viewing responsible investing on a spectrum is a great opportunity to guide interested investors who feel overwhelmed by how to put their priorities into action.
Please let me know if you have any questions or concerns or simply want a second opinion. I can be reached at Michael.carbone@raymondjames.com or 978-455-7799.
Please see important disclosures and sources below. Thanks for reading!
-Michael
Incorporating sustainable investing criteria into the investment selection process may result in investment performance deviating from other investment strategies or broad market benchmarks.
Past performance is not indicative of future results and there is no assurance that any investment strategy will be successful.
Any opinions are those of Michael Carbone - not necessarily those of Raymond James. The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that is accurate or complete. Expressions of opinion are as of this date and are subject to change without notice. Investing involves risk and you may incur a profit or loss regardless of the strategy selected.
Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services are offered through Raymond James Financial Advisors, Inc. Eppolito Financial Strategies, LLC is not a registered broker/dealer and is independent of Raymond James Financial Services.
Certified Financial Planner Board of Standards, Inc. owns the certification marks CFP® and CERTIFIED FINANCIAL PLANNER™ in the U.S.
Stocks offer long-term growth potential but may fluctuate more and provide less current income than other investments. An investment in the stock market should be made with an understanding of the risks associated with common stocks, including market fluctuations and the potential loss of principal.
Michael Carbone is a private financial advisor located in Chelmsford, MA. Michael is a CFA Charterholder (CFA®) and a CERTIFIED FINANCIAL PLANNER6 . He has bachelor’s and master’s degrees in business and finance. Michael works with individuals and families. Michael and his Partner, Larry Eppolito, have a combined 46 years of experience.
Eppolito Financial Strategies, LLC. is not a registered broker/dealer and is independent of Raymond James Financial Services. Investment Advisory Services offered through Raymond James Financial Services Advisors, Inc..
