Investing in line with personal values is increasing in popularity and new investment products are entering the market to meet this demand, but what should investors expect? Is there an expected risk/return tradeoff between traditional index investing and socially conscious index investing? We are joined by Grady Smith, senior portfolio manager at Dimensional Fund Advisors, to delve deeper into ESG investing, which stands for Environmental / Social / Governance. Here is what we covered:
– Please help us define ESG investing
– What does the data suggest about possible differences in returns from ESG investments?
– How does an investment or lack of investment in a company actually impact that company?
– How does an investment manager figure out which elements of E, S, and G to emphasize?
– How are emerging social concerns like censorship, for example, taken into account?
– Can you imagine a future with totally customizable ESG investing?
– How can an investor estimate their impact from ESG investing?