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Responsible Investing Grows More Popular with Investors

Responsible investing allows you to invest in ways that align with your values without sacrificing financial performance. 

The expression “put your money where your mouth is” may be more possible than you realize. Responsible investing options allow you to invest your money in a way that aligns with your values while potentially minimizing risk. 

“More and more people want to invest in companies that match their values – or they want to avoid investing in companies that don’t match their values,” says David Alt, PNC Asset Management Group’s head of Responsible Investing. At PNC, responsible investing includes methods of investing in which you can choose how to invest your money based on environmental, social or governance issues, as well as financial performance. 

Although responsible investing has been around for decades, it’s gaining popularity now that there are mainstream options for people at all different income levels and for those passionate about different causes and issues. Companies also are growing more conscious about making socially responsible decisions, providing more options for responsible investors. Some groups, such as Millennials, Generation X and non-profit organizations are particularly interested in responsible investing right now, but they’re not the only ones taking advantage of it. In 2016, responsible investment strategies accounted for $1 of every $5 being professionally managed in the United States – and the number will likely continue to grow.[1]

“Identity is important for both people and organizations. For example, a non-profit organization that supports cancer patients may want to invest in a way that will help advance their mission. Investing in tobacco stocks would obviously be contrary to their mission. We can help them avoid those kinds of contradictions and align with their values while planning their investment portfolio. The same is true for individuals,” Alt says. 

Getting Started with Responsible Investing

Alt says that if you want to start using responsible investing strategies, you should find a trusted advisor. “There is a lot of confusion surrounding responsible investing. In the past, there was a stigma about underperformance, but now there are ways to screen things out and reinvest funds to better match the benchmark returns you’re seeking. This allows you to get the same relative performance without sacrificing your values,” he says. 

Most responsible investing options come down to your position on four intentions:

  1. Making an Impact: targeting specific outcomes, typically in private markets
  2. Doing No Harm: aligning your values and portfolio on an exclusionary basis (screening out and avoiding certain causes)
  3. Managing Risk: using strategies focused on environmental, social or governance standards and risks
  4. Doing Good: aligning values and portfolio in an inclusionary manner (by supporting certain causes) 

Some popular “do good” factors include alternative energy, green building and sustainable water. Popular “do no harm” factors for investors are board composition, climate change, labor standards and human rights. 

“The key point is that responsible investing is a journey, not a destination, and we believe the proper guidance of a trusted advisor could help to pave the way for investors,” Alt says.

 

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Responsible Investing

Responsible investing considers social, environmental and governance factors to help meet financial goals while managing risk and supporting personal beliefs or values. PNC offers a variety of responsible investing solutions to help meet investor needs, whether they want to do good, make an impact, manage risks or do no harm.

Responsible investment strategies account for more than $1 of every $5 being professionally managed in the U.S.* -- and the number will likely continue to grow.

Responsible investing has grown* 33 percent from 2014 to 2016.  

 

 

*Assets under sustainable and responsible investment strategies in the United States increased from $6.57 trillion in 2014 to $8.72 trillion in 2016. Source: US SIF Foundation

 

The PNC Financial Services Group, Inc. (“PNC”) uses the marketing name PNC Wealth Management® to provide investment and wealth management, fiduciary services, FDIC-insured banking products

and services, and lending of funds through its subsidiary, PNC Bank, National Association (“PNC Bank”), which is a Member FDIC, and to provide specific fiduciary and agency services through its

subsidiary, PNC Delaware Trust Company or PNC Ohio Trust Company. PNC does not provide legal, tax, or accounting advice unless, with respect to tax advice, PNC Bank has entered into a written tax

services agreement. PNC does not provide services in any jurisdiction in which it is not authorized to conduct business. PNC Bank is not registered as a municipal advisor under the Dodd-Frank Wall

Street Reform and Consumer Protection Act (“Act”). Investment management and related products and services provided to a “municipal entity” or “obligated person” regarding “proceeds of municipal

securities” (as such terms are defined in the Act) will be provided by PNC Capital Advisors, LLC, a wholly-owned subsidiary of PNC Bank and SEC registered investment adviser.

“PNC Wealth Management” is a registered service mark of The PNC Financial Services Group, Inc. 

Investments: Not FDIC Insured. No Bank Guarantee. May Lose Value. 

©2018 The PNC Financial Services Group, Inc. All rights reserved.

 

David Alt
David Alt is the head of responsible investing at PNC

Being a good corporate citizen is part of PNC’s DNA. We have the right people, right intentions and right solutions to meet the diverse needs of all of our clients.

David Alt


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