As cinematographers, we all have our favorite filters. Regardless of the type, the filters we rely on generally take away something undesirable like glare or sharpness while other filters enhance or add something desirable to the look to our images. Often, we use more than one filter at a time in order to achieve specific visual outcomes. We can apply the same concept to financial assets and other resources by utilizing Environmental, Social and Governance (ESG) “filters” to decision making processes.
Simply put, ESG filters offer enhanced ways to add value, resilience and long-term focus to resource allocation strategies while mitigating risk. Investing filters were developed by the socially responsible investing movement in the 1960s to negatively screen out or divest from companies, industries or countries with ties to tobacco production, pollution, apartheid, etc.
These investment strategies have evolved to incorporate social impact, sustainability and leadership criteria in response to corporate scandals like Enron and the financial irregularities that led to the Great Recession of 2008. Most importantly, ESG filters were designed in support of the United Nations Sustainable Development Goals (SDGs) in order to use the power of global markets to respond to pressing challenges like climate change, inequality and biodiversity loss while seeking to augment diversity, peace and justice.
European-based investment companies have used ESG filters along with traditional investment financial analysis since the early 2000s. ESG and sustainable investment strategies have become more mainstreamed in recent years accounting for a 25% rise in ESG investments from 2015 to 2017 allowing investors to utilize ESG filters to achieve specific or contextual outcomes.
According to Standard & Poors (S&P) Market Intelligence, 14 of 17 ESG mutual and exchange traded funds outperformed the S&P 500 during the first half of 2020 during the COVID-19 pandemic.
It is easier now more than ever before to tailor personal finance strategies to grow assets without compromising personal, societal or environmental goals and values. And members don’t have to be wealthy to apply these filters.
Two of the most important options are free. Firstly, exercise the right to vote. Just like President Lindley says, GO VOTE, every single time there is an election. Secondly, complete a 2020 Census survey for your address. Voting and the Census have huge impacts at local, state and federal levels and directly influence education, healthcare, jobs, infrastructure, et cetera. Next, look at how your banking institutions, credit card or favorite consumer companies have responded to the COVID-19 pandemic and Black Lives Matter movement. Do companies’ responses match your values and goals?
For a deeper dive into ESG and the United Nations Principles for Responsible Investment (UNPRI) go to their website. There members can learn more about ESG investment tools, sustainability issues and look up signatories to the UNPRI.
For more information on this and other Green Corner topics or to get involved with Local 600’s Green Committee Green contact Kristin Glover (email@example.com), Allison Elvove (firstname.lastname@example.org), Katherine Bomboy (email@example.com), and Renzo Spirit Buffalo (firstname.lastname@example.org).
Katherine Bomboy, M.S. Sustainability, MBA, CR Green Committee Chair