How to Start Matching Your Portfolio to Your Values
So, maybe you read Part One of our ESG investing series, and now youâre wondering what to do next. At Arbor Capital, we can certainly guide you through the process of adding ESG investing, also called sustainable investing to your portfolio, but we know investor education is important, too. Check out the below steps for a better understanding of how you can become an ESG investor. As always, you can reach out to us anytime if you have questions or if youâd like additional information.
Any sort of portfolio construction can seem complicated and knowing where to begin is sometimes the most significant challenge. ESG Investing doesnât have to be complex, though. Here are four steps you can use to get the ball rolling and accomplish your sustainable investing goals.
Step 1: Clarify What ESG Investing Means to You
This step is an internal process of discovery where youâll ask yourself questions like:
- Why is ESG investing important to me?
- In what ways do I want to make an impact?
- What are my financial objectives?
Knowing âwhyâ can help you create a foundation for your portfolio building. Does your motivation come mostly from wanting to emphasize the good, or suppress the bad? Is it a mix of both? Then, get specific and think about areas youâd like to impact with Environmental, Social, or Governance change. Maybe more responsible distribution of clean water is important to you. Or maybe you want to target education or hunger issues. There are many ways to be an ESG investor and you can see more about the issues you can impact on our ESG page.
At Arbor Capital, we can also help walk you through this part of the internal discovery process to ensure you understand your own ESG investing motivation and goals.
Step 2: Fully Understand Your Existing Portfolio
Many investors âset and forgetâ their portfolios, so if this is you, then you should actively review what youâre currently investing in. ESG investing is intentional investing, so get in the habit of knowing your portfolio inside and out. Itâs important for any investor to properly balance risk based on their circumstances and goals, and to diversify, too.
If youâve been avoiding diving into the specifics of your investments, or you feel you wonât understand your portfolio fully, we can assist you with this step, too.
Step 3: Know Your Sustainable Investing Options
There are many ways to invest in a socially responsible way. There are sustainable fixed-income funds, sustainability-linked bonds, and ways to both directly and passively support companies promoting your personal ESG goals.
This is the step in the process where itâs especially helpful to have professional assistance. At Arbor Capital, we will talk through all your options and customize an ESG investing strategy thatâs in line with your needs and goals.
Step 4: Transition Your Portfolio
Timelines differ by the investor, but itâs generally a good idea to make your portfolio transition to ESG a gradual one. This ensures you can be mindful of tax implications, as well as stay on track with your desired risk and return profile, too.
At Arbor Capital, our goal is to help you make an impact and build your wealth, too. We are intentional and strategic as we build your portfolio transition plan, and weâre happy to answer questions and address concerns you may have along the way.
The ESG Investing Process Can Be Lengthy â But Rewarding
The four steps above arenât necessarily prescriptive in all cases. After all, each investor comes into the process with a unique set of needs, goals, and preferences. There are many diverse paths you can take to enter the world of ESG investing, and having a trusted financial professional at your side can illuminate the steps and paths that are right for you.
At Arbor Capital, weâre excited to help investors transition into the exciting and rewarding world of ESG investing. If youâre ready to have an initial discussion about your goals, questions, or concerns, get in touch with us today. We look forward to hearing from you!
