Viewpoint: Socially Responsible Investing Has A Politics Problem

Wednesday, April 3, 2019

By Zach Conway

As a topic up for public discussion, socially conscious investing comes with some political touchiness, mostly thanks to its inherent interconnection with the broader climate science debate. Just as our overall political climate has pulled us further apart and closer to the poles of our partisan spectrum, the divisiveness surrounding socially conscious investing has created the appearance of two camps in total opposition. And just as in our political discourse, fundamentally important nuance falls to the wayside.

In turn, much of the financial industry continues to discount any socially conscious approach as misguided philosophy, therefore dismissing consistent demand from investors. And as some socially conscious investors may themselves misunderstand or overlook meaningful details, advisors remain unwilling to engage. In fact, only 18% of financial advisors in 2017 reported ever having a conversation with clients about responsible investing options, according to Nuveen. Yet about three quarters of investors seek that kind of investment solution, according to Morgan Stanley.

Photo courtesy of Shever.

Source: Forbes (link opens in a new window)

climate change, ESG, impact investing