ESG: The Next Step in Issues-Based Investing

Historically, values-based investor requirements were mostly exclusionary: avoiding ownership of stocks with exposure to certain industries such as tobacco or nuclear power. Today, however, investor demands have grown to incorporate a broader range of issues and ideas, and a wider range of perspectives. Recognizing this, IW Financial has pioneered a much more flexible approach, giving investors the ability to include or exclude stocks or conduct best in class analysis based on a broad range of user-defined criteria.

Over the last few years many investors have seen the value of their shareholdings negatively impacted by a host of new concerns, including corporate governance, compensation practices, and global trade. As a result, what was originally known as socially responsible investing (SRI) has broadened to include a broader range of issues and concerns which we define as Environmental, Social, and Governance (ESG).

IW Financial has led the way in redefining SRI and promoting broader use of ESG criteria by portfolio managers and investors. We recognize that ESG-based investing creates value by addressing investors concerns, avoiding risks, and identifying those companies where the policies and behavior are correlated with positive stock market returns.

Unique Concerns, Unique Portfolios: Integrating ESG into the Investment Process

Our technology and consulting services provide a vehicle for putting these principles into action by making it simple to integrate ESG investing into the investment management process.

Advances in technology have made it possible to bring a significantly higher level of custom portfolio construction to a wider range of investors. As a result, portfolio management capabilities which were once offered only to large institutions are now available to managed account and mutual fund sponsors as well.

With solutions from IW Financial, financial services firms can identify specific client preferences and seamlessly incorporate the resulting guidelines into the investment process. Customized portfolios can be built from the ground up; conversely, standard portfolios can be analyzed and reviewed to ensure they meet with client guidelines.