SMART Investing Services
for Individuals

SMART Investing Services for Individuals

SMART (Sustainability Metrics Applied to Risk Tolerance) ®

ESG: The GPS of Investing™

Twenty years ago, if you were driving from one destination to another, you might use a large fold-out map to chart your course. Over the past several years, these maps have become obsolete, as more data lives in our GPS systems than 10,000 maps could possibly provide. Currently, we even have access to live data feeds that alert us to traffic and other potential hazards so that we may reach our destination as quickly as possible.

Similarly, the only data available to us twenty years ago to help elevate stock performance were public financial statements. Like the fold-out maps of old, these statements give us only a part of the data now available when evaluating the investment potential of a company. 

Recent studies show that financial statements and reports on tangible assets represents about 13 percent of a company’s valuation.1  What then accounts for the other 87 percent?  Welcome to the arena of ESG, or Environmental, Social, and Governance Investing.

Request a Consultation

Climate impact and greenhouse gas (GHG) emissions, energy efficiency, air and water pollution, water scarcity, biodiversity, and site restoration.

Human rights, local community impact and employment, child labour, working conditions, health and safety, and anti-corruption.

Alignment of interests, executive compensation, board independence and composition, and other shareholder rights.

2

Since 2015, studies show that ESG outperformance opportunities exist in many areas of the market. Recent findings from more than 2,200 unique primary studies show that there is clear material evidence for the business case of ESG investing.3

SMART Investing Services act like your car’s GPS system to capture and filter through ESG data that is now available to investors. Recent advances in technology make it possible to utilize millions of data points to screen for the best companies across multiple industries. ESG metrics capture this data and allow investors to see what is imperative to stock performance, allowing them to make decisions in real time.

ESG analysis is the starting point and foundation of SMART Investing Services, but upon a client’s request, we can also add Socially Responsible (SRI) and Impact Investing metrics.

ESG Investing

ESG Investing is the foundation of our SMART Investing approach, and consists of the integration of environmental, social and governance factors into the fundamental investment process.  It is the process of using good information that is more readily available every day through big data and artificial intelligence (AI) to make decisions about what stocks you want to own.  Regardless of a client’s level of interest in a values-based approach, investing without ESG data is like driving without using your car’s GPS.  ESG Investing is the foundation of a good portfolio because it helps avoid the potential pitfalls and hazards of intangible asset risk.

SRI Investing

Above ESG, we can also incorporate Socially Responsible Investing (SRI) screens into our process, where we can layer in a values-based approach with our clients by filtering out certain stocks or complete sectors.  Examples of SRI screens include fossil fuel, fire arms, tobacco, and many others.  SRI can also be used to drive investment themes such as climate change, access to clean water, gender equality, etc.  SRI screens can be layered on top of ESG screens, but they are not the same thing.

Impact Investing

Impact Investing is an investment into a company with the intention of generating a measurable environmental and/or social impact alongside a financial return.  Many of the Impact investment options that we consider are linked to the UN SDGs (United Nations Sustainable Development Goals). For clients with an interest in having a measured impact on environmental and/or social issues, we offer a variety of private and alternative investment options and are continually evaluating the potential of others.

ESG, SRI and Impact Investing are three very distinct sectors, and each one builds on top of the other. If you would like to learn more about our SMART Investing Services for Individuals, please contact us for a free consultation.

UN PRI

Gitterman Wealth Management is a signatory to The United Nations-supported Principles for Responsible Investment (PRI) Initiative, an international network of investors working together to put the six Principles for Responsible Investment into practice.  Its goal is to understand the implications of sustainability for investors and support signatories to incorporate these issues into their own investment decision-making and ownership practices.  In implementing the Principles, signatories contribute to the development of a more sustainable global financial system.

SMART (Sustainability Metrics Applied to Risk Tolerance)® Environmental, Social, and Governance Investing Services for Individuals

Request a Consultation

Planetary

Jeff Gitterman is also an Associate Producer of the feature documentary film PLANETARY, in partnership with VIMEO, Reconsider Films, and Planetary Collective.

References

[1] 16 Ocean Tomo, Backgrounder on Ocean Tomo 300® Patent Index (OT300):  www. oceantomo.com/productsandservices/investments/indexes/ot 300.

[2] http://www.cppib.com/en/how-we-invest/sustainable-investing/integrating-esg/

[3] Gunnar Friede, Timo Busch & Alexander Bassen (2015) ESG and financial performance: aggregated evidence from more than 2000 empirical studies, Journal of Sustainable Finance & Investment, 5:4, 201-233, DOI: 10.1080/20430795.2015.1118917

About Our Firm

We’ve been fostering meaningful relationships for over a quarter century.

Learn More