Modern-day investors are often just as interested in promoting change as in making money. ESG/SRI—environmental, social and governance/socially responsible investing, also known as impact investing—is the practice of seeking out investment opportunities in companies that focus on social or environmental issues. Still, it’s important to balance the desire to do good with finding the right investments—those that both promote real, positive change and help the investor grow their financial resources.
Financial advisors need to be prepared to help their clients do their due diligence before channeling money into impact investments. Below, eight professionals from Forbes Finance Council share the resources and tools they use to learn about and advise clients on the best impact investments.
1. Bloomberg
My go-to resource for impact investing ideas and education is Bloomberg. Their platform is much more than a compilation of ESG/SRI lists and rankings. It allows users to sort and evaluate across 20-plus factors, including carbon emissions, human rights, diversity and shareholders’ rights. It’s one of the few platforms that is both rich when it comes to ideas and robust when it comes to tools. - Alexey Bulankov, Mechanics Bank Wealth Management
2. ESG Data Vendors
ESG data vendors such as MSCI provide valuable insight into impact investing. Having an overview of ESG methodology helps clarify the variables one can act on. In practice, financial advisors can partner with a direct indexing provider to deliver a solution that best fits the investor’s goals from both an impact and financial perspective. - Jonathan Hudacko, Just Invest
3. Global Impact Investing Network
The one resource I turn to in order to learn about impact investing is the Global Impact Investing Network. This is a global platform where impact investors coalesce to help increase the scale of impact investing. - Seema Chaturvedi, AWE (Achieving Women Equity) Funds
4. Impact Investing Institute; Next Billion
I suggest starting with the educational materials on the Learning Hub of the Impact Investing Institute and the Next Billion open forum, whose mission is to explore the connection between development and for-profit business. - Dmitry Dolgorukov, HES FinTech
5. Barclays’ Impact Series
I’m a big fan of Barclays’ “Impact Series,”which comprises free white papers and PDFs breaking down the latest research in ESGs and impact investing. Although it focuses a bit too much on bonds, the Impact Series is an excellent source of research on investment-grade corporate bonds that match social ESG goals as well as sustainable credit investing. - Tyler Gallagher, Regal Assets
6. Change Catalyst’s Resource Guide
Melinda Epler, the CEO of Change Catalyst, has a wonderful Impact Investing Resource Guide full of informative links. It includes guides, case studies, books, videos, articles and more. - Amir Eyal, Mylestone Plans LLC
7. S&P Global
S&P Global provides multiple layers of ESG insight. Financial institutions can leverage its Corporate Sustainability Assessment (CSA) during the investment process to assess ESG factors. Its financial materiality matrix identifies which ESG factors are likely to have the most significant impact on a company’s business value drivers of growth, cost, risk and, ultimately, future financial performance. - Lijie Zhu, Dragon Gate Investment Partners
8. U.N.’s Sustainable Development Goals
Investors are increasingly taking into consideration the impact of their investments. A great blueprint for impact is the 17 Sustainable Development Goals adopted by the United Nations in 2015. Alignment with these goals and their related thematic issues helps impact-oriented investment solutions contribute to positive outcomes that benefit the world. - Martin Jarzebowski, Federated Hermes
This article originally appeared on Forbes.
