How ESG Can Help Your Practice as an RIA

For advisors, having the option to sit down and speak with a client about a topic that is important to them, but not strictly related to their investment performance, can be a very powerful tool. This is one of the benefits of having a strong Environmental, Social, and Governance (ESG) capability, especially since younger investors and women – two demographics quickly accumulating wealth – have shown such strong interest in the space. These robust conversations will also lead you to get to know your clients on a more personal level and potentially develop a level of trust that didn’t previously exist.

How ESG Can Help Your Practice as an RIAFrom a financial standpoint, the myth that investors may have to give up performance in order invest in companies with responsible environmental, social and governance characteristics has repeatedly been disproven. On the contrary, going forward, as ESG becomes more mainstream, there is increasing financial risk in owning stock in a company that has been a consistent environmental polluter, no matter how profitable the company may be.  As investment firms around the world receive more and more questions around their ESG controls, even if they do not market their products as ESG/Socially Responsible Investing (SRI), there is increasing pressure from institutional and retail investors to allocate capital to responsible companies. This suggests companies that do not meet investors’ ESG criteria may be forced to trade at a discount along with having a regulatory cloud hanging over the company. The same can be said of companies in the technology space, since security and privacy concerns are as important as ever.


Interested in learning more on how ESG investing can help your practice and increase opportunities?
If you are located in the Milwaukee/Chicago area, we invite you to join us at the Dana headquarters on Thursday, June 27th for an intimate Lunch & Learn hosted by Dana.  We will be covering the topic of ESG and how it can help your practice. More information is available here

  Register for Dana's Lunch & Learn


The universe of acceptable investments for ESG and SRI funds may be limited as compared to other funds. Because these funds do not invest in companies that do not meet their ESG or SRI criteria and may sell portfolio companies that subsequently violate their screens, they may be riskier than other funds that invest in a broader array of securities.

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