Director of Sustainability Data Kellen Parker and Relationship Manager Claire Quigley reflect on our recent webinar with the Intentional Endowments Network and As You Sow. 

by Claire Quigley and Kellen Parker

We were privileged to partner with the Intentional Endowments Network and As You Sow for a webinar on debunking the myths around sustainable investing. It was a stimulating and informative conversation led by Director of Sustainability Data Kellen Parker and Relationship Manager Claire Quigley.

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Today, we are delighted to share some of the key learnings from that webinar on the wide world of sustainable investing.  

• Personalized Values Alignment: Sustainable investing at Ethic isn’t one-size-fits-all; it’s designed to align investments with each individual’s values. We aim to avoid assigning investors a generic "ESG" label.
• Performance and Impact Go Hand-in-Hand: Sustainable investing doesn’t mean sacrificing performance. Our SMAs are structured to track a client’s selected benchmark, enabling value-based investing without compromising on returns.
• Unified Impact Through Values-Aligned Investing: Aligning charitable giving and investments can amplify impact. This helps ensure that portfolios reflect a client's values rather than cancel out their charitable work.
• Improving Sustainability Data Quality: We work to enhance data reliability by sourcing from multiple providers and performing rigorous quality checks.

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Myth: ESG is a blanket term, describing a one-size-fits-all framework

To us, sustainable investing is all about values alignment. We don’t believe in a one-size-fits-all approach. At Ethic, investment criteria, powered by sustainability data, are personalized to reflect what matters most to the individual investor. Whether you call it ESG (Environmental, Social, and Governance), SRI (Socially Responsible Investing), values-aligned investing, or sustainable investing — the key takeaway is the same. Investors should be empowered to invest in companies that resonate with their values. At Ethic, we strive to ensure that investors can tailor their portfolios to reflect the issues they care about, thus our platform offers a more nuanced approach than the "ESG" label might suggest.

Myth: Investing in impact requires sacrificing performance

You don’t have to compromise on returns to invest according to your values. We’ve actually found that sustainable investing often complements performance goals. Ethic’s public equity SMAs (separately managed accounts), for example, are designed to track a client’s chosen benchmark within a set tracking error budget. This means clients can pursue their financial goals, while aligning their portfolios with their values and working to minimize any negative impact on investment performance.

Myth: Impact should focus on charitable giving, while investments should focus on returns

Any disconnect between charitable giving and investment portfolios can diminish the impact of both. For instance, a client may donate to organizations dedicated to animal welfare, but their investments could include companies engaged in animal testing. Or a client committed to lung cancer research might unknowingly hold stock in tobacco companies. Sustainable investing strives to ensure that your investments and values are in harmony, creating a more meaningful, aligned impact.

Myth: ESG is political and partisan

While it’s true that the term "ESG" has become politicized in recent years, sustainable investing is far from a partisan issue. In fact, we’ve found that people across the political spectrum care deeply about aligning their investments with their values. At Ethic, we work with clients who hold a wide range of values near and dear but who are all seeking personalized solutions that reflect their unique perspectives. Sustainable investing is not about politics — it’s about personalizing your portfolio to match your values.

Myth: Sustainability data quality isn’t good enough yet

While sustainability data is still evolving and lacks standardization, there are numerous ways to ensure its quality. Ethic takes a proactive approach to this challenge by utilizing multiple data providers to gather diverse types of data. We avoid relying on top-level ESG scores and instead use advanced data quality checks and estimation models to catch outliers, providing a more comprehensive, reliable view of a company’s performance. While no data set is perfect, it’s possible to build a responsible, well-informed portfolio with the right tools and attention to detail.

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