Broad Motivations for Sustainable Investing
The ins and outs of various approaches to ESG issues.
Improve The World
Improve Investments
ESG as a Portfolio Constraint
ESG as a Portfolio Objective
Source: Morningstar, Inc.
Maximize your portfolio’s positive ESG factors just as you would optimize for risk and return.
What?
Do No Harm
Make a Difference
How?
Choose funds that use exclusionary strategies to limit exposure to controversial companies.
Choose funds that produce specific outcomes or thematic funds.
Use Morningstar Sustainability Ratings to identify funds with lower ESG risks.
Why?
To avoid negative impact or invest in line with values-based principles.
To own companies making a positive impact.
To reduce exposure to long-term economic threats to companies’ viability.
Limit ESG Risk
Constrain for ESG preferences in the same way you would constrain for liquidity, sector, or region.
Source: Morningstar, Inc.
Improve The World
Maximize your portfolio’s positive ESG factors just as you would optimize for risk and return.
ESG as a Portfolio Objective.
To own companies making a positive impact.
Choose funds that produce specific outcomes or thematic funds.
Make a Difference
To reduce exposure to long-term economic threats to companies’ viability.
Use Morningstar Sustainability Ratings to identify funds with lower ESG risks.
Limit ESG Risk
Maximize your portfolio’s positive ESG factors just as you would optimize for risk and return.
ESG as a Portfolio Objective.
Improve Investments
Source: Morningstar, Inc.
Source: Morningstar, Inc.
Constrain for ESG preferences in the same way you would constrain for liquidity, sector, or region.
Constrain for ESG preferences in the same way you would constrain for liquidity, sector, or region.
Why?
How?
What?
Why?
How?
What?
ESG as a Portfolio Constraint.