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active role in addressing systemic this notion has been floating around new to impact investing. Additionally,
social issues through their business for a while, a great deal of research both Morningstar (Morningstar.com) and
practices. Despite their different goals, tells us a different story. Studies show MSCI (MSCI.com) provide “sustainability
these are both examples of impact that companies with higher ESG ratings” for funds and indices, with the
investing. However, these scenarios scores and ratings can outperform goal of helping to evaluate whether
are more than hypothetical. In one comparable firms—in both accounting a company or fund aligns with an
survey, respondents identified climate and stock market terms. 9 investor’s goals. 11
change as one of several factors
supporting the recent interest in Many employees have begun If this investment approach interests
sustainable investing. 7 pressuring their employers to be more you, look to your financial professional
socially responsible, which has, by for guidance. Even if they don’t directly
Modern Influences: proxy, made these companies more specialize in impact investing, they can
Why Now? attractive to impact investors. A recent still offer you the most personalized
survey showed that roughly 70% guidance. At the end of the day,
There are several possible reasons of millennials in the workforce said impact investing gives you the chance
that impact investing is on the rise. that if their employer had a strong to pursue your financial goals and
For many investors, their personal sustainability plan, it would positively consider the well-being of those in
values, beliefs, and goals have made affect their decision to stay with that your community and around the world.
impact investing an attractive route company over the long term. 10 What could be better than that?
to growing wealth. Remember that
impact investors aim for strong Ready to Learn More? 1. Morningstar.com, June 2, 2020
financial performance in addition to
2. MorganStanley.com, 2019
making a difference through their 3. Morningstar.com, June 2, 2020
These days, you can find impact-friendly
investments. Another important factor 4. MyCNote.com, November 15, 2019
funds through most of, if not all, the
may be how the performance of 5. Forum for Sustainable and Responsible
major investment companies. Wherever Investment, 2019
impact investing funds compares with
you are investing, your investment 6. Forum for Sustainable and Responsible
conventional funds over time. 8 Investment, 2019
professional should be able to provide
information on each fund. For those who 7. MorganStanley.com, 2019
Some may worry that by closely 8. Morningstar.com, April 16, 2020
are curious to learn more, the Forum for
aligning their investments with their 9. Forum for Sustainable and Responsible
Sustainable and Responsible Investment Investment, 2020
values, the return potential of their
(USSIF.org) provides numerous 10. FastCompany.com, February 14, 2020
portfolio could be limited. Although
resources and information for individuals 11. The companies mentioned are for
informational purposes only and should
not be considered a substitute for a more
comprehensive review of the role impact
investing can play in a diversified portfolio.
Remember that diversification is an
approach to help manage investment risk.
It does not eliminate the risk of loss if
security prices decline.

2020 FALL MAGAZINE | 11