Here at the Rikoon Group, we have a long history of socially responsible and sustainable investing. Our firm was the first Registered Independent Advisory company in New Mexico to specialize in finding publicly traded companies that incorporate high standards for their environmental impact, social values, and corporate governance. We believe that not only can we help our clients feel good about investing in companies with high ethical and environmental standards, but in addition, these companies actually can provide superior performance over the long run. One reason to consider using this investment approach is that it encourages more companies to incorporate these standards going forward. As many people start to resonate with this style of investing, we all can be a part of a growing movement to help shape a better future for our families and the planet.
Our approach seeks to incorporate environmental, social, and governance factors (ESG) into a well-rounded financial analytical process that leads to good investment decisions. Some of its aspects are: environmental stewardship, data protection, product safety, waste management, energy efficiency, workplace diversity, accounting transparency, ethical behavior in host communities and frequent reporting of the company’s progress towards achieving goals. Such efforts impact a company’s bottom line-while reducing their regulatory and legal risks. For example, firms that don’t treat employees well usually exhibit high attrition rates and increased costs associated with recruiting and training. Companies that have little regard for the environment may save money in the short run but they can incur debilitating expenses due to accidents or chronic pollution. Adherence to a high standard of ESG (Environmental, Social, Governance) factors can have a direct, positive impact on the price, profitability and market share momentum of a company’s stock position. High-quality companies who behave in accordance with our principles are better positioned to outperform those that do not because they eventually have lower operating costs, more attractive capital allocations, more innovation, and lower employee turnover. They are desirous of ensuring the continuity of their good reputation among consumers so we believe that such companies can be considered “sustainable”.
Many investors want to play a pivotal role in addressing global issues with solutions government organizations can’t achieve on their own. According to studies, about 84% of Millennials (those born between 1980 and 2002) have expressed a specific desire to follow sustainable investing principals. As millennials enter their 40s and 50s, which are their peak earning decades, they will demand investing that combines meaningful social and environmental impact alongside of monetary returns.
While there is no denying that the current investment landscape can be a tough one in which to invest, we reject the notion that capitalism is under siege. Rather, capitalism needs to adapt so it can actively participate in solutions to global problems. As we have learned, that’s the path to some of the most exciting investments out there. If companies are proactive and intentional, they can avoid risks, do a better job of governing, and boost their bottom line, all at the same time. Unsurprisingly, companies that incorporate ESG into their operations tend to work more productively with their stakeholders, investors, employees and customers.
In today’s world of computer generated investing styles (robo investing) and huge mass marketing efforts on the part of global financial firms, there are many options for managing your money. Consider investing with us and having a positive impact with your money. We can help align your values with your portfolios so you can invest sustainably, alongside many of our other clients.