Should we invest in sustainable funds?
If we choose sustainable funds, will our investment returns suffer? Will our expense ratios be sky-high? What drawbacks might we face?
How do we know that these funds are actually ethical? And what choices are out there for people who want to invest ethically or sustainably?
We invited Dr. Jon Hale to our show today to answer these questions.
Dr. Jon Hale is a chartered financial analyst and the global head of sustainability research for Morningstar. He directs Morningstar’s research on sustainable investing, which launched with the Morningstar Sustainability Rating for Funds in 2016.
We were inspired to conduct this interview on sustainability after we heard a question from one of our community members, Lily. She left a voicemail asking:
“Why don’t we hear anything about ethical investing in the Financial Independence Retire Early (FIRE) movement? I’ve had trouble locating socially responsible funds in the past, and I wonder if these funds are labeled well or if they’re essentially a scam. Is there a third-party reviewer of these funds?”
We’ve received similar emails and messages from others in the community. It’s clear that this is an important issue, and we wanted to do it justice.
Jon’s expertise on this subject made him the perfect person to bring in to answer the big question: how can we invest in a way that aligns with our values?
Listen to the episode for Jon’s insights on socially responsible investing.
You’ll enjoy this episode if:
- Investing in questionable funds has gnawed at your conscious for long enough
- You’re skeptical about the quality of ESG (environmental, social, corporate governance) funds and want the details on how these funds are chosen and managed
- You want a framework for how to view the different types of ESG funds available to invest in
- You want to take a more active role in choosing your investments to ensure that they align with your values and lifestyle
Resources Mentioned:
- ESG Advisor blog
- Sustainable Funds US Landscape Report
- 2019 ESG Proxy Voting Trends
- Sustainalytics
- Sustainable Accounting Standards Board (SASB)
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