Do you know what's in your portfolio? Are you investing in companies that don't meet your values or standards? We can answer these questions and more.
Sustainable investing
You have the power to change the world with your investments. Sustainable investing is now a widely used strategy for achieving financial returns, and social or environmental goals. But the space is evolving and new opportunities arise all the time. It can be daunting. Our team has everything you need to understand your options and execute your sustainable investing strategy. That includes analytic tools to gauge how aligned your current portfolio is with your values. And we can help set parameters, select products and create a transition plan.
Decoding the Elements of Sustainable Investing
Sustainable investing is an increasingly viable means to align your investments with your social or environmental goals. But what’s the best way for you to go about it?
Here, Jessica Matthews, Global Head of Sustainable Investing for J.P. Morgan Private Bank, describes four key pathways that can help you clearly and simultaneously achieve both imperatives.
Ms. Matthews: Sustainable investing has been an area of increasing interest to clients in the past couple years with investors who view investments as a way that they can further align with their philanthropic or social or environmental goals. So what is sustainable investing? Investors hear a whole litany of different terms that can be somewhat confusing: the so-called alphabet soup of impact investing, ESG, SRI, responsible investing, MRI.
We at J.P.Morgan use the term sustainable investing as the broad umbrella term to describe approaches that align with financial and social and environmental goals, and four different areas or approaches that can be used either individually or in concert across the entire portfolio.
The first is exclusionary screening or negative screening where investors can choose a specific issue area or sector that they'd like to exclude from the portfolio, like tobacco, weapons, or gambling.
The second is environmental, social and governance integration or ESG integration. This is where investors can choose to align their portfolio with ESG principles, and that can be done in a way that is both aligned with investors' values, so investors might want to choose the best actors along environmental standards, or it might really be from a more risk-mitigation or return-enhancing standpoint. For example, an investor might say, "We're worried about climate change and we'd like to be thinking about exposures in our portfolio."
The third is thematic investing, and as it sounds, investors might chose a specific issue area or theme that they want to tilt the portfolio towards. This can include funds that are environmentally focused, gender-diversity funds, or community development funds, all with a specific theme or issue area that a client is driving towards.
The last is impact investing, and this is primarily found in the private capital markets. And an important distinguishing feature of impact investing is that the investments are made with intentionality. That means intentionality towards creating a certain social or environmental outcome.
So how do we work with clients? Pulling it all together, there are several different steps we take if a client indicates that they'd like to explore a sustainable investing portfolio. Often the first step is actually just starting with education. Clients really want to bring us in to help them level set and understand what the space looks like and what these different approaches are that they could take. Second, we work with clients to develop their goals, asking several key questions like what are you trying to accomplish with your sustainable investing program?
And are there certain issue areas that you want to tilt towards or perhaps remove from the portfolio? And with implementation, we're really seeking to customize a portfolio along the lines of those goals that those clients described to us.
We can do this across the entire portfolio, or if clients desire, we can just do it in certain parts of the portfolio in a more incremental way. But ultimately, our goal is to work with clients to implement both their financial objectives and their social and environmental objectives, and we really feel like we can do this in concert with each other.
We feel like we're well positioned at J.P.Morgan to help you achieve your sustainable investing goals. Please feel free to call your J.P.Morgan advisor for more information.
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Opinions expressed are those of the speakers and may differ from those of other J.P. Morgan employees and affiliates. Neither J.P. Morgan nor any of its affiliates can represent that the statements or opinions expressed today will materialize.
This is not an investment research video. The views and strategies described may not be suitable for all investors. This video is not intended as personal investment advice or as a solicitation or recommendation. If you are considering any investment or strategy, you should speak with your J.P. Morgan representative before investing. Past performance is no guarantee of future results.
Please read important information at the end of the presentation.
INVESTMENT PRODUCTS:
• NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
On screen:
A JPMorgan Chase and Company logo appears. Next, Jessica Matthews, a woman with dark hair and brown eyes, stands by a wall-sized window overlooking a tree and a city street.
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Jessica Matthews. Global Head of Sustainable Investing, J.P. Morgan Private Bank.
Ms. Matthews:
Sustainable investing has been an area of increasing interest to clients in the past couple years with investors who view investments as a way that they can further align with their philanthropic or social or environmental goals. So, what is sustainable investing? Investors hear a whole litany of different terms that can be somewhat confusing: the so-called alphabet soup of impact investing, ESG, SRI, responsible investing, MRI.
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A forest of evergreens appears, along with text.
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THE RANGE OF TERMINOLOGY:
Environmental, Social, and Governance (ESG)
Responsible Investing
Impact Investing
Socially Responsible Investing (SRI)
Green Investing
Community Investing
Mission Related Investing (MRI)
Values Based Investing
Double/Triple Bottom Line Investing
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A close-up of Ms. Matthews.
Ms. Matthews:
We at J.P. Morgan use the term sustainable investing as the broad umbrella term to describe approaches that align with financial and social and environmental goals -
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Sustainable Investing - Investment approaches that incorporate financial as well as social and environmental objectives.
Ms. Matthews:
And four different areas or approaches that can be used either individually or in concert across the entire portfolio. The first is exclusionary screening or negative screening where investors can choose a specific issue area or sector that they'd like to exclude from the portfolio, like tobacco, weapons, or gambling.
Text on screen:
Exclusionary Screening - Avoid investing in companies and sectors that do not align with your values.
Text on screen:
ESG Integration - Integrate environmental, social and governance issues into your investing approach.
Ms. Matthews:
The second is environmental, social and governance integration or ESG integration. This is where investors can choose to align their portfolio with ESG principles, and that can be done in a way that is both aligned with investors' values, so investors might want to choose the best actors along environmental standards, or it might really be from a more risk-mitigation or return-enhancing standpoint.
On screen:
Trees tower over a clear river. Next, a large wall of solar panels.
Ms. Matthews:
For example, an investor might say, "We're worried about climate change and we'd like to be thinking about exposures in our portfolio."
Text on screen:
Thematic Investing - Investing according to your interest in specific sectors or innovations
Ms. Matthews:
The third is thematic investing, and as it sounds, investors might chose a specific issue area or theme that they want to tilt the portfolio towards.
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A montage shows: a massive dam; young girls working together on computers; and construction workers building a house.
Ms. Matthews:
This can include funds that are environmentally focused, gender-diversity funds, or community development funds, all with a specific theme or issue area that a client is driving towards.
Text on screen:
Impact Investing - Invest in specific companies, organizations or funds that are doing work you want to support
Ms. Matthews:
The last is impact investing, and this is primarily found in the private capital markets. And an important distinguishing feature of impact investing is that the investments are made with intentionality. That means intentionality towards creating a certain social or environmental outcome.
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In a J.P. Morgan building, an executive looks over a report. Next, a client consults with an advisor in a spacious office, overlooking a metropolitan city. Next, two men in business suits shake hands. Next, a group of executives meet in a conference room. Then, a close-up of Ms. Matthews.
Ms. Matthews:
So how do we work with clients? Pulling it all together, there are several different steps we take if a client indicates that they'd like to explore a sustainable investing portfolio. Often the first step is actually just starting with education. Clients really want to bring us in to help them level set and understand what the space looks like and what these different approaches are that they could take. Second, we work with clients to develop their goals, asking several key questions like what are you trying to accomplish with your sustainable investing program?
Text on screen:
What are you hoping to accomplish through your sustainable investing program?
Ms. Matthews:
And are there certain issue areas that you want to tilt towards or perhaps remove from the portfolio?
Text on screen:
What areas in the sustainable investing space would you be interested in exploring?
Ms. Matthews:
And with implementation, we're really seeking to customize a portfolio along the lines of those goals that those clients described to us.
On screen:
In a stylish corporate lobby, two J.P. Morgan executives shake hands with two clients. Then, a close-up of Ms. Matthews.
Ms. Matthews:
We can do this across the entire portfolio, or if clients desire, we can just do it in certain parts of the portfolio in a more incremental way. But ultimately, our goal is to work with clients to implement both their financial objectives and their social and environmental objectives, and we really feel like we can do this in concert with each other. We feel like we're well positioned at J.P. Morgan to help you achieve your sustainable investing goals. Please feel free to call your J.P. Morgan advisor for more information.
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J.P. Morgan.
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Aligning investments with values
How do you want to put your investment dollars to work for social good? Maybe you want to avoid companies whose products you don’t support. Or that aren’t doing what they should to protect the environment. Maybe you want to help companies that support the empowerment of women and girls.
Or maybe you don’t know exactly what impact you want to have.
Whatever your priorities are, we can work with you to create an investment strategy that strikes the right balance between your sustainable investment objectives and your risk and return expectations. You can choose from a range of investing approaches, alone or in concert:
- Exclusionary screening: Avoid investing in companies or sectors whose products or business practices do not align with your values or meet other standards.
- Environmental, social and governance (ESG) integration: Actively integrate ESG issues into investment due diligence and financial analysis.
- Thematic investing: Invest in companies that target specific issue areas or themes, such as water, clean energy and gender diversity.
- Impact investing: Invest in companies or projects to generate positive social and/or environmental impact alongside financial return.
Our robust sustainable investing platform spans asset classes, and allows you to support a range of social and environmental themes and issues areas, including water, clean energy, healthcare, infrastructure, urbanization, faith-based and gender lens.
With priorities established and investments selected, we’ll work with you to set a timeline you’re comfortable with. You may prefer to gradually transition your portfolio to sustainable investments, or perhaps you’re ready to jump right in. Either way, we’ll establish a prudent implementation plan that works for you over the long run. One that takes into account your preferences, risk tolerances and overall sustainable investing goals.
There’s often a misperception that you have to sacrifice returns if you want your investments to be aligned with your values. But with the right tools and advice, you can achieve both your financial and sustainable investing goals.
Walking the talk with you
At J.P. Morgan, we practice what we preach. We show our commitment to creating positive societal change through corporate initiatives in communities across the globe and advancing sustainability both for our clients and in our own operations. We integrate environmental, social and governance (ESG) considerations into the policies and principles that govern our entire company.
It’s a far-reaching commitment. We have:
- Underwritten more than $13.5 billion in green and bonds with a sustainable use of proceeds
- Provided $1.2 billion for wind and solar projects in the U.S.
- Committed or arranged over $18 billion in financing for wind, solar and geothermal energy projects in the U.S. since 2003
*Source: 2017 Environmental, Social and Governance Report, J.P. Morgan Chase & Co.
And we’re proud of the recognition we’ve received for our sustainable investing services and support. J.P. Morgan was named:**
- Best U.S. Private Bank for Socially Responsible Investing in the 2018 Euromoney Survey.
- Best Private Bank for Social Responsibility, receiving a 2018 Global Finance Award.
- 2017’s Most Valuable Corporate Funder by Inside Philanthropy for efforts to fight urban poverty.
- #1 on Fortune’s 2017 “Change the World” List.
**Awards or rankings are not indicative of future success or results. Published information is generally based exclusively on material prepared and/or submitted by the recognized recipient. To learn about selection criteria, contact the issuing third-party, non-affiliated organization(s).
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Exclusionary screening -
Environmental, social and governance integration In addition to helping you align your portfolio with your sustainable investing goals, ESG integration is also just good, smart investing. We can help you utilize this popular investment approach.
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Thematic investing If you’re looking to support a specific social or environmental issue within your portfolio, thematic investing opportunities may be a good fit.
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Impact investing Impact investing may be the most exciting of all the sustainable investing strategies. It's intended to generate measurable positive social or environmental impact alongside financial return. Learn more.
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