How to incorporate Responsible Investing into annual planning

New year, new goals?

The start of a new year offers a good opportunity to review your personal as well as financial goals. Being aware and cognizant of your plan is crucial, and as you reflect on the past year and look ahead toward the future, it can be a prudent time to decide to either make some changes or stay the course.

Have you considered incorporating new solutions into your investment portfolio? Have you considered responsible investing and how to incorporate it into your portfolio?

New topics

Responsible investment is still a new topic for many to understand. Learning the terminology is step one. Many individuals have different definitions of what responsible investing means to them, and this can lead to the various applications of responsible investing: integration of environmental, social and governance (ESG) factors; ESG screening and exclusions; thematic ESG investing; and impact investing.

Investors can implement responsible investing into their portfolios through several strategies and across different asset classes. These approaches are not mutually exclusive. An investment product or portfolio can incorporate more than one strategy, and multiple strategies can be applied simultaneously within the investment process.

An investor may be interested in exploring the various approaches to better understand if and when a particular approach may fit into their financial plan. We think now is an opportune time to understand the definitions and to consider any future portfolio implementation.

Determine your approach

Different goals may lead to a different responsible investing approach, as you may want to:

• Incorporate material ESG data alongside traditional financial analysis

• Invest in companies with responsible environmental and social practices

• Exclude certain areas to align with personal values and beliefs

• Support specific themes, issues or causes

• Target innovations that aim to help solve social or environmental challenges

• Invest in a measurable impact

• Consider charitable or philanthropic giving strategies

Getting started

Education is a great place to start when it comes to investment-related topics. Reflect on when and how the various applications of responsible investing may fit into an investment portfolio. Contact your advisor to learn more about this topic and the capabilities available, including a copy of our Responsible Investing workbook. Generational wealth transfer presents an opportunity for families to further discuss this topic. Responsible investing can help bridge the generation gap as it can spark discussions around various family values and principles. Consider setting up a financial wellness check-in on your personal financial goals and to see how responsible investing may fit into your investment portfolio in the future.