Americans long thought that nature could take care of itself — or that if it did not, the consequences were someone else’s problem. As we know now, that assumption was wrong; none of us is a stranger to environmental problems. Industrial workers, for example, are exposed to disproportionate risks from toxic substances in their surroundings. The urban poor, many of whom have never had the chance to canoe a river or hike a mountain trail, must nevertheless endure each day the hazardous effects of lead and other pollutants in the air.
– President Jimmy Carter in a May 3, 1977 message to Congress
Hello and welcome again to the latest edition of the Socially Inspired InvestorSM. In this edition we turn our focus to an investment option that really hasn’t been around for a long time – Green Bonds.
According to State Street Global Advisors, “ESG considerations are becoming increasingly relevant in fixed income investment portfolios. While ESG is [now] at the top of many institutional investor’s agendas, the focus has primarily been on the equity portion of their investments; but this is changing. Investors are now putting more thought into how to successfully embed ESG into their fixed income investments.”
This is so true. Without a doubt articles written on the subject of ESG investing today – and we read a lot of them – mostly feature equity solutions, which tend to be broad and aspirational but are only part of the solution and opportunity. Bonds – green, social, sustainable – are more targeted to address specific problems that exist today. They are also a critical component of a balanced portfolio. We have chosen this critical area to explore in this issue because of their unique applications and the dearth of objective information available to the average investor.
When it comes to exploring the ins and outs of socially responsible investing in bonds, SII has brought together content from experts in the field. We will hear from Heather Lang, executive director, sustainable finance at Sustainalytics, a Morningstar company. We also feature insights from Greg Hasevlat, sustainability research analyst at IMPAX Asset Management. In addition, as always, we have curated for you relevant articles you can find in our ESG in the news section.
“None of us is a stranger to environmental problems” – Pres. Carter said that over 40 years ago!
But we do see today and continue to be inspired by, the coming together of vast intellectual resources on a global scale focused on making the future better for ourselves and future generations. We should allow ourselves to be encouraged.
As investment solutions expand and mature, we become more and more inspired that the world will become a better, far more values-focused place to live. Investors are realizing that they can vote their investment dollars without having to disadvantage their return targets.
Our overall message is that we continue to be inspired, and it will take inspiration, and an ever-increasing awareness and commitment of time and treasure.
Enjoy this issue. We hope you’ll find within it new insights.