Environmental, social and governance integration

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Opinions expressed are those of the speakers and may differ from those of other JPMorgan employees and affiliates. Neither JPMorgan 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 JPMorgan 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

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This video begins with Marisa Buchanan, a dark-haired brown-eyed woman in an open office space with plush chairs. She wears a bright red shirt.

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Marisa Buchanan. Executive Director, JPMorgan Director of Sustainable Finance. 

Ms. Buchanan:

The growth in sustainable investing is really being driven by a number of factors.  One important one is that I think investors increasingly realize that ESG issues, these are environmental, social, and governance issues, are really important for the companies in which they invest, and that focusing on ESG issues can be important in terms of managing risks but it can also be important in terms of identifying companies that may be positioning themselves for good, strong, long-term performance. Secondly, I think attitudes about investing are really changing.  I think the notion that investing is something that is separate from the mission of an organization has really been shifted, and I think the next generation has had a real strong influence on that trend. What we've seen on many of these campuses is that students have been influential in getting schools just to really open a broader dialog around where their investments are being made, the impacts that these are having more broadly, and are really starting to create a new conversation around how endowments should be managed.

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A wide spectrum of sustainable investing strategies.

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A close-up of Ms. Buchanan.

Ms. Buchanan:

While relevant ESG issues may differ for different companies and sectors there are a few that investors commonly look at.  These can be things like air pollution, climate change and water. They can also be issues like community relations and labor issues as well as issues with respect to corporate governance We see some investors using it as a way to identify companies that they may want to avoid because they think these companies may be exposed to higher risk due to these ESG issues.  We also see a number of investors starting to use ESG integration as a way to identify the types of companies that they really want to invest in because they think they're best-in-class performers.  If you're investing in a company that's in the power sector let's say a power company could face a number of environmental, social, and governance issues, things like impending regulations on air pollution, climate change, issues like water, as well as how that company as a whole is being managed from a governance perspective and really thinking about these risks and how they're going to respond proactively to them.

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Making ESG issues a part of the due diligence process.

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Ms. Buchanan:

There are many different ways that investors can think about integrating ESG issues into their investment process.  We like to think about it as really good fundamental due diligence and analysis.  So, when an investor is doing their due diligence and looking at all of the financial factors and issues that inform one's investment decision it's also important to look at some nonfinancial factors, some of these environmental, social, and governance factors. 

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Getting started.

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Ms. Buchanan:

For those institutions that are really interested in learning more about this, the best place to really start is with education.  So one, really getting up to speed on the spectrum of sustainable investing and what the different strategies look like, and then secondly I think really looking to create a dialogue with the right stakeholders and people within your organization and also outside of your organization to think about your organization's goals and your missions. There are a number of great resources out there.  There are some third-party organizations, some nonprofit organizations that are producing research and insights that may be valuable.  JPMorgan itself also has a wealth of knowledge and resources and we're here to really work with our clients and help them in any way that we can. 

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