Why talk to clients about ESG investing? First, mainstream firms like BlackRock and Columbia Asset Management are launching proprietary investment portfolios to provide existing clients with ESG investment choices. These firms and their competitors for institutional and retail clients also hope to attract new investors who want to allocate some percentage of their portfolio to ESG funds.*
Second, the green bond market is currently one of the fastest growing segments of private ESG investing.** This represents a major shift in mainstream investor sentiment, especially among institutional investors, toward a long-term investment horizon and income generating asset classes.
Third, ESG investing has always been values focused and had plenty of heart. Today some of the best minds in the investment industry are dedicated to creating a competitive advantage for their firms in this space. Morgan Stanley, for example, is recruiting the best and brightest from top MBA programs around the country through sponsorship of a sustainable investing challenge.***
Fourth, ESG, climate change, sustainability, carbon footprint—these stories are part of the major media cycle on a daily and weekly basis. In other words, your clients and prospective clients are reading and hearing about environmental issues, the E in ESG, at least weekly. Do you think they might be open to talking about how some focus on these issues in their investment strategy could improve portfolio performance and effectively manage risk?
Think about all this, but not for too long. Your local competition down the street is also thinking about it, and how to seize the marketing advantage around ESG investing in your community.