Guest speaker: Graham Nolen
Wednesday, March 2, 2016 from 6:00 PM to 8:00 PM
Graham Nolen is a financial advisor with Morgan Stanley, where he started in 2015 in the Callea/Cintron group. The group provides financial advisory and asset management services with a focus on financial and estate planning.
Investing with Impact
This topic is often referred to as ESG investing (Environmental, social, governance). ESG investing first emerged the 1970’s but has gained popularity in the past 10 years.
ESG investing is the school of thought that believes a company’s environmental, social and governance impact are a crucial part the evaluation of its investment merits along with traditional factors such as profitability and growth prospects. There are four categories in which ESG generally falls into, the first of which is a negative screen called ‘values alignment’ where certain investors avoid exposure to certain industries they have an ethical or moral obligation to (i.e. tobacco, firearms). The next is integration of ESG topics in alongside the typical financial analysis, an example of this would be determining a metric to evaluate the labor practices of companies that can be evaluated alongside various financial metrics. Third, is determining an industry to invest in with a certain thematic exposure such as investing a sizable sum in a group of solar energy companies. Lastly, ESG investing is not limited to a the public markets, as it can be done on the private level where investors look to find specific companies whose business model has a certain ESG concern built into it.
While investing with an ESG lens can bring can satisfy certain moral and ethical needs of investors, it also can be used as another way to evaluate and reduce risk. Some of the biggest financial disasters over the years have been due to company’s poor ESG records. Whether it’s Enron, Volkswagen or any company in the coal industry, they all could have raised ESG red flags that lead to their loss in value.
Graham Nolen will introduce the concept to those that may be unfamiliar and then lead a discussion about the merits and downsides of the using ESG lens for investment purposes.