An ESG Hiring Spree

For What It's Worth -

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When all the superheroes converge on the scene, you know something big is about to happen. In the corporate world, we’re seeing a serious ramp-up in efforts to build out teams specifically focused on ESG policies and investing — something big is indeed happening. This “talent war,” as The Financial Times phrased it, is running rampant across sectors and industries.

Last month, accounting powerhouse PwC announced they’re starting a five-year hiring spree to add 100k new jobs to support clients in their sustainability and diversity reporting. We’re also seeing market-leading corporations hire new heads of sustainability. As these teams assemble and grow, we see a clear signal that learning how to invest in line with our values — for individuals and institutions alike — is the future of investing.

What is "Greenwashing" and how can you avoid it?

At its most basic, greenwashing is when a company gives a false impression or promotes misleading information to a potential investor or consumer about the environmental or social impacts of their product, or about their ESG practices (thanks, handy FWIW common terms resource!). For instance, a company may say it is “sustainable,” “organic,” or “green,” but these claims may not always be what they seem. Always feel empowered to dig deeper to be confident in your investments.

Experts predict that greenwashing will get worse as ESG investments continue to gain popularity because the sector lacks a universal rating system to compare companies on their ESG ratings. For now, it’s up to each of us to carefully research companies and funds to make sure they align with our values. Check out these tools to learn about your investments and screen for sustainability preferences.  

Finding your motivation

Getting out of bed on Mondays, keeping up with our health goals, sending that email we’ve been putting off — finding the right motivation to do things we care about can be a challenge. Thankfully, we can take inspiration from people around us by understanding what drives them to stay motivated. Research from MSCI (one of the world’s leading providers of tools and services for the global investment community) identified three motivators for ESG Investing:

• incorporating personal values;

• higher returns from ESG incorporation; and

• the desire to make a positive impact.

True to their name, the Visual Capitalist shares some insightful visualizations from the report, bringing color [ahem] to these factors.

If you’re wondering what integrating ESG into your own investments might look like, review this guide from NerdWallet. Once we lock in on what motivates us, we’re unstoppable — just think what that can do for your portfolio and the planet.

Women’s investing edge

It’s no secret that women are still often paid less than men for the same day’s work, but Maurie Backman of Motley Fool lays out research on the gender gap since 2020 that shows women face other headwinds in growing their wealth. Less confidence, less risk tolerance, less money in stocks, and fewer women Chartered Financial Planners — in large part due to systemic inequities and the prevalence of outdated norms. That’s a lot of ‘less,’ but it’s not the whole story — the research also shows that women tend to invest better by 40 basis points (h/t to Investopedia for this primer on basis points), invest more thoughtfully, and save money better.

What to do with all of this? Backman says, ‘recognize the need to engage,’ ‘keep fighting for change,’ ‘learn,’ and ‘start young’ (or how about start now even). We can all take a page from this report to channel our own investing edge.

Before you go —

ESG shareholder proposals brought to a vote this year have been 75% more successful than last year.