Latest / Money In Motion with Klaas Financial / Invest with Impact: The Power of Socially Responsible Investing

Transcript

Invest with Impact: The Power of Socially Responsible Investing · Money In Motion with Klaas Financial

• 0:00
  Speaker 1: At our phone lines. They are open to you right now.
• 0:02
  Speaker 1: If you have questions for our retirement planning professionals from
• 0:05
  Speaker 1: Class Financial. All I gotta do is pick up phone
• 0:07
  Speaker 1: dial the station at six oh eight three two one
• 0:10
  Speaker 1: thirteen ten. That's three two one thirteen ten. We'll get
• 0:13
  Speaker 1: you on the air with Malia Quavis and Josh Stirling.
• 0:16
  Speaker 1: As mentioned, they are our retirement planning professionals, and they
• 0:19
  Speaker 1: come to us from Class Financial. Their website clssfinancial dot
• 0:23
  Speaker 1: com that's Class k Laasfinancial dot com and their telephone
• 0:27
  Speaker 1: number six so eight four four two five six three seven.
• 0:31
  Speaker 1: No charge for that initially, get to know your appointment
• 0:33
  Speaker 1: Deck Loss Financial. It will be complimentary to you again.
• 0:36
  Speaker 1: The office right here in Madison six oh eight four
• 0:38
  Speaker 1: four two five six three seven, and you get on
• 0:40
  Speaker 1: the air this morning. Just call the station at six
• 0:42
  Speaker 1: oh eight three two one thirteen ten at six oh
• 0:45
  Speaker 1: eight three two one thirteen ten as mentioned, joined this
• 0:48
  Speaker 1: week by Malia Wavis and Josh Sterling. Malia, how are
• 0:51
  Speaker 1: you doing this morning?
• 0:53
  Speaker 2: I'm doing great. The weather's been great. I made it
• 0:56
  Speaker 2: up to Wisconsin to the State Fair last weekend. Really
• 1:00
  Speaker 2: he's very, very hot, but very exciting and his first
• 1:05
  Speaker 2: time up there to go to the State Fair. But
• 1:07
  Speaker 2: I enjoyed. I paid fifteen dollars to park for the
• 1:11
  Speaker 2: privilege of parking in the parking lot, but it was
• 1:14
  Speaker 2: going to take an hour and a half to get
• 1:16
  Speaker 2: into the parking lot, so therefore I walked a mile
• 1:19
  Speaker 2: with my family, so we paid for the right to
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  Speaker 2: walk into the fairgrounds. But great fair, lots of great
• 1:25
  Speaker 2: food up there, and exciting to see everybody out and about.
• 1:28
  Speaker 1: That is really cool to heary. I love getting to
• 1:31
  Speaker 1: the State Fair. It's always always a great time. And
• 1:33
  Speaker 1: of course joining us this morning as well as Josh Sterling, Josh,
• 1:37
  Speaker 1: how you doing this week.
• 1:38
  Speaker 3: One and Sean Day, very very good, Thank you very
• 1:41
  Speaker 3: much for having us here today.
• 1:42
  Speaker 1: Great to have you both on and of course we've
• 1:44
  Speaker 1: got to always it's there's never like a week where
• 1:47
  Speaker 1: I look at the topic and I go it's always like,
• 1:49
  Speaker 1: oh my goodness, this is great. We're going to be
• 1:51
  Speaker 1: talking about another great topic this week, something unique when
• 1:54
  Speaker 1: it comes to investing. We'll get the details from Malia
• 1:57
  Speaker 1: and Josh in just a moment. As mentioned, I talked
• 1:59
  Speaker 1: about the website classfinancial dot com. Well tell you a
• 2:01
  Speaker 1: little bit about what's all there. Of course, you can
• 2:03
  Speaker 1: learn more about Class financially. You can learn about their
• 2:05
  Speaker 1: separate divisions. You can learn more about the folks at
• 2:07
  Speaker 1: Coss Financial, the team there, a little bit about what
• 2:10
  Speaker 1: they do, and a little bit about how they spend
• 2:11
  Speaker 1: their free time, some of their great hobbies. Also, if
• 2:14
  Speaker 1: you scroll down to the bottom of the page Cossfinancial
• 2:16
  Speaker 1: dot com, you'll see a little envelope it says stay current.
• 2:19
  Speaker 1: Right there you can sign up and subscribe to the
• 2:20
  Speaker 1: weekly Market Pulse newsletter. It's a fantastic weekly email that
• 2:24
  Speaker 1: you can listen back to. This podcast got a link
• 2:27
  Speaker 1: to that as well as some recent news and some
• 2:30
  Speaker 1: snapshot of what's been going on in the markets. Again,
• 2:33
  Speaker 1: just head on over to Clossfinancial dot com. From there
• 2:35
  Speaker 1: you can sign up for that Market Pulse newsletter. Speaking
• 2:38
  Speaker 1: of the podcast, if you do miss part of today's program,
• 2:40
  Speaker 1: of course you can get that weekly Market Polse weekly
• 2:44
  Speaker 1: email on the podcast, but also you can listen right
• 2:46
  Speaker 1: at Clossfinancial dot com. There telephone number six oh eight
• 2:49
  Speaker 1: four four two five six three seven, And at first
• 2:52
  Speaker 1: appointment at Class Financial, it will be complimentary to you.
• 2:55
  Speaker 1: Again their number six oh eight, three, two, one, thirteen ten.
• 2:57
  Speaker 1: One of the really cool features of the show is
• 2:59
  Speaker 1: every week we do the class Quiz question week This week,
• 3:01
  Speaker 1: no exception, chance for you to win a fantastic prize.
• 3:04
  Speaker 1: This week, our friends from Class Financial have provided a
• 3:07
  Speaker 1: twenty five dollars gift card to Cabela's. Little Tip. Oftentimes,
• 3:10
  Speaker 1: the question and answer to the class Quiz question leak
• 3:13
  Speaker 1: come up during the program. Tell you a little bit
• 3:15
  Speaker 1: more about how you can win that a little bit
• 3:16
  Speaker 1: later on in the show. Before we get rolling on
• 3:19
  Speaker 1: this week's conversation about a very cool type of investing,
• 3:23
  Speaker 1: let's actually take a look back at last week's question
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  Speaker 1: the week, get the question and the answer there as well, Malia.
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  Speaker 2: Yes, So last week we had a great discussion about
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  Speaker 2: basically a midyear tax checkup. So for everybody looking at
• 3:37
  Speaker 2: how they can improve on their tax situation for next year.
• 3:42
  Speaker 2: Things that you could do now, which might be including
• 3:45
  Speaker 2: adding more into your retirement plans at work, or be
• 3:49
  Speaker 2: becoming more organized, or even maybe finding tax preparer CPA
• 3:53
  Speaker 2: to help you file for next year's taxes. So we're
• 3:57
  Speaker 2: always planners trying to get ahead of the game. So
• 4:00
  Speaker 2: back to that show, if any of that interests you.
• 4:02
  Speaker 2: But our question of the week was what is the
• 4:04
  Speaker 2: maximum that you can put away into your four oh
• 4:07
  Speaker 2: one K in twenty twenty four if you are fifty
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  Speaker 2: five years old? Was it multiple choice twenty five thousand,
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  Speaker 2: five hundred or thirty thousand, five hundred. Barbara of Madison
• 4:21
  Speaker 2: was the first to the phones with a correct answer.
• 4:23
  Speaker 2: The correct answers thirty thousand, five hundred is the amount
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  Speaker 2: that you can put away into your employer retirement plan
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  Speaker 2: by December thirty first of this year. So look at
• 4:34
  Speaker 2: your own situation and see if you can enhance that
• 4:37
  Speaker 2: for next year.
• 4:38
  Speaker 1: Really good advice too. As far as planning from last
• 4:40
  Speaker 1: week's program, you definitely want to listen back, or if
• 4:42
  Speaker 1: you missed last week's show, check that out. Just head
• 4:45
  Speaker 1: on over. As Malia mentioned Klaus Financial dot com. That's
• 4:48
  Speaker 1: Klaasfinancial dot com our telephon number six so eight four
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  Speaker 1: four two five six three seven. So today mere talking
• 4:54
  Speaker 1: about a special type of investing that some folks may
• 4:57
  Speaker 1: already be doing or may be sent. Hey, that's very cool.
• 5:01
  Speaker 1: I'm interested in participating. Malia, tell us a little bit
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  Speaker 1: about that.
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  Speaker 2: Yeah, so excuse me. Today we're excited to have Josh
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  Speaker 2: Sterling on with us. He's a CFA or a Chartered
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  Speaker 2: Financial Analyst, and he also happens to be our director
• 5:15
  Speaker 2: of portfolio management here at Class Financial. And Josh is
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  Speaker 2: going to help educate us today on exactly what is
• 5:23
  Speaker 2: meant by this ESG investing world. And really this type
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  Speaker 2: of investing has gained a lot of traction with many
• 5:31
  Speaker 2: investors recently. However, it's been going on for a while,
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  Speaker 2: but you know buzzwords, it takes a while for everyone
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  Speaker 2: to start assimilating them. So today we want to discuss
• 5:41
  Speaker 2: this type of investing again. Many people are already currently
• 5:44
  Speaker 2: engaged in it, others are curious about the nuances of it.
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  Speaker 2: So Josh, we're going to have you expound on this
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  Speaker 2: and not confuse us. That's the goal of today.
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  Speaker 3: Absolutely, Well, we'll take this kind of complicated topic. There's
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  Speaker 3: tons of definitions out there, but why don't we just
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  Speaker 3: dive into ESG investing at the most basic level. So,
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  Speaker 3: at the most basic level, ESG investing stands specifically for environmental,
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  Speaker 3: social and governance. This type of investment looks at the
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  Speaker 3: company's stances on environmental, social and governance practices, alongside more
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  Speaker 3: traditional financial measures. Now, like Malia said, you might hear
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  Speaker 3: ESG in the media talked about as simply as equality
• 6:30
  Speaker 3: focused or climate focused, but these factors do consider financial
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  Speaker 3: risks and inclusion of shareholder interests. So let's talk through
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  Speaker 3: each of these factors specifically and talk about how those
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  Speaker 3: scenarios could come up. So, the first and most talked
• 6:48
  Speaker 3: about ESG factor is the environment. This is commonly associated
• 6:52
  Speaker 3: with a company's carbon footprint, which looks at the level
• 6:56
  Speaker 3: of carbon emissions the company releases in the environment and
• 7:00
  Speaker 3: their policy on overall energy consumption. Carbon footprints are something
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  Speaker 3: that investors care deeply about and want to see change
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  Speaker 3: within the companies, trying to reduce that as much as possible. However,
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  Speaker 3: there's also financial risk factor within the environmental category, and
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  Speaker 3: we see it in practice, probably most commonly with utility companies.
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  Speaker 3: These are things that pop up in the news every
• 7:24
  Speaker 3: once in a while. But let's talk about one that
• 7:27
  Speaker 3: maybe we all kind of remember. So back in twenty
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  Speaker 3: twenty one in California, Pacific Gas and Electric was found
• 7:34
  Speaker 3: to be the cause of the second largest wildfire in
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  Speaker 3: California's history that led them to be fined forty five
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  Speaker 3: million dollars. Unfortunately, this follows other similar finds that PG
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  Speaker 3: and E has received in recent years. This can show
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  Speaker 3: that a company that puts time and effort into mitigating
• 7:53
  Speaker 3: fines could benefit both the environment and the bottom line
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  Speaker 3: of the company. So moving on to the second factor
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  Speaker 3: that's talked about a lot. We have social factors, and
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  Speaker 3: this refers to how companies impacts individuals and the community.
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  Speaker 3: Think about topics like donating to local charities or bigger
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  Speaker 3: issues associated with safety risks to employees in a manufacturing setting.
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  Speaker 3: If social factors aren't monitored, bigger problems around employee strikes
• 8:24
  Speaker 3: or consumer boycotts can impact the business's bottom line.
• 8:28
  Speaker 1: Talking this morning with Josh, Josh Stirling and Mili Aquaevasa,
• 8:31
  Speaker 1: retirement planning professionals from Class Financial, you can learn more
• 8:34
  Speaker 1: about Claus Financial. They've got a great website colssfinancial dot com.
• 8:37
  Speaker 1: That's coss k l aas Financial dot com and their
• 8:40
  Speaker 1: telephone numbers six eight four four two five six three
• 8:43
  Speaker 1: seven No charge for that initial gets know you appointment
• 8:45
  Speaker 1: tech Loss Financial, It will be complimentary to you. Sorry
• 8:48
  Speaker 1: about that, Josh, gotta interrupted there, but I know you
• 8:50
  Speaker 1: were going to mention. You mentioned that there's there's another
• 8:52
  Speaker 1: factor as well when it comes to evaluating these these investments.
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  Speaker 3: Oh yeah, yeah. The final one, which is sometimes leftop
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  Speaker 3: but it's actually fairly important is governance. And this one
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  Speaker 3: is the quality and impact of leadership and structure of
• 9:10
  Speaker 3: the business. This evaluates things like executive compensation, management oversight,
• 9:17
  Speaker 3: and employee benefits. Companies that don't have quality governance practices
• 9:22
  Speaker 3: are at greater risk of mismanagement of the company, operations,
• 9:26
  Speaker 3: or even employees. This could be a tech company's misuse
• 9:30
  Speaker 3: of personal data or a company encouraging employees to make
• 9:33
  Speaker 3: false claims to promote their products over the competition. Both
• 9:37
  Speaker 3: situations may be driven by management decisions or cultural impact
• 9:41
  Speaker 3: to push the boundaries for financial gains. While this might
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  Speaker 3: generate profits in the short term, in the long run,
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  Speaker 3: it could expose the company to lawsuits or regulatory fines overall.
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  Speaker 3: ESG is an investment strategy that aims to generate both
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  Speaker 3: social change and positive financial returns for an investor.
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  Speaker 1: Really interesting stuff this week talking with Josh Stirling and
• 10:04
  Speaker 1: Malia Quavis. They are our retirement planning professionals from Class Financial.
• 10:08
  Speaker 1: If you have a question for Malia and Josh. We'd
• 10:10
  Speaker 1: love to have you join us this morning. All I
• 10:11
  Speaker 1: got to do to get on the air is call
• 10:12
  Speaker 1: the station at six oh eight three two one thirteen
• 10:15
  Speaker 1: ten at six soh eight three two one thirteen ten.
• 10:18
  Speaker 1: We'll get you on the air with our retirement planning
• 10:19
  Speaker 1: professionals from COSS Financial. You can learn more about Class
• 10:22
  Speaker 1: Financial on their website Colss financial dot com. That's k
• 10:25
  Speaker 1: l Aas Financial dot com. Tell a number for the
• 10:28
  Speaker 1: office right here in Madison six so eight four four
• 10:30
  Speaker 1: two five six three seven. Don't forget that first apployment,
• 10:33
  Speaker 1: a co loss financial, no charge. She'll be complimentary to
• 10:36
  Speaker 1: you again their number six oh eight four four two
• 10:38
  Speaker 1: five six three seven. So, Emily, it sounds like ESG investing.
• 10:42
  Speaker 1: It's got a lot of gained a lot of popular recently.
• 10:45
  Speaker 1: Is this type of investing? Is this a new thing
• 10:48
  Speaker 1: or what's kind of the background here?
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  Speaker 2: Interesting backgrounds. So, while ESG investing has gained a lot of,
• 10:56
  Speaker 2: as we said, mainstream popularity, contrary to that widespread belief,
• 11:01
  Speaker 2: this type of investing actually began a long time ago.
• 11:05
  Speaker 2: So in the early years, ESG was referred to as
• 11:08
  Speaker 2: socially responsible investing or SRI for short, so you hear
• 11:12
  Speaker 2: those acronyms being thrown around. And this original type of
• 11:16
  Speaker 2: investing started, believe it or not, in the mid seventeen hundreds,
• 11:20
  Speaker 2: so more than two hundred years ago. And one of
• 11:23
  Speaker 2: the earliest promoters of SRI was John Wesley. He was
• 11:27
  Speaker 2: one of the founders of the Methodist Church, and he
• 11:31
  Speaker 2: outlined to others that your use of money should be
• 11:34
  Speaker 2: not to hurt your neighbor through the use of business practices,
• 11:39
  Speaker 2: and he suggested to avoid industries back then like tanning
• 11:43
  Speaker 2: and chemical production which could harm the health of workers.
• 11:47
  Speaker 2: So there's also there was also a suggestion to him
• 11:51
  Speaker 2: that investors should avoid companies associated with quote sinful practices
• 11:57
  Speaker 2: such as guns, liquor, and tobacco. It's always interesting to
• 12:00
  Speaker 2: go back to c where were the roots to all
• 12:04
  Speaker 2: of these different things, And that's quite a long time ago.
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  Speaker 2: The modern era of SRI evolved in the sixties with
• 12:12
  Speaker 2: investors leaning toward companies that were sensitive and addressing equality
• 12:16
  Speaker 2: for women, civil rights, and labor issues. And since the
• 12:20
  Speaker 2: late nineteen nineties this type of investing has really expanded
• 12:23
  Speaker 2: beyond those social issues and then now commonly referred to
• 12:27
  Speaker 2: as ESG. So the focus expands to promoting environmentally sustainable
• 12:34
  Speaker 2: development and it looks at companies governance models. So that's
• 12:38
  Speaker 2: where we now lean on Josh to tell us exactly
• 12:41
  Speaker 2: what is ESG looking like today.
• 12:45
  Speaker 3: Well, in today's investment world, we've seen sustainable investing become
• 12:50
  Speaker 3: quite popular, so popular in fact, that a report put
• 12:54
  Speaker 3: out recently by the Global Sustainable Investment Review showed that
• 12:58
  Speaker 3: in twenty twenty two there was a globally over thirty
• 13:01
  Speaker 3: trillion dollars in ESG focused investments, which is a substantial
• 13:06
  Speaker 3: amount of all invested assets. Now, you might wonder who
• 13:11
  Speaker 3: is choosing to go into ESG investments, and there are
• 13:14
  Speaker 3: many different types of people or institutions that purposefully select
• 13:19
  Speaker 3: this investment style. Some of the common examples are everyday
• 13:23
  Speaker 3: investors who invest as a part of their savings or
• 13:26
  Speaker 3: retirement plans that use mutual funds that specialize in seeking
• 13:30
  Speaker 3: companies with good labor and environmental practices. You also have
• 13:34
  Speaker 3: credit unions and community development banks that have specific missions
• 13:38
  Speaker 3: of serving low in middle income communities. Hospitals and medical
• 13:43
  Speaker 3: schools that might refuse to invest in tobacco companies, foundations
• 13:47
  Speaker 3: that support community development, loan funds and other high social
• 13:52
  Speaker 3: impact investments in line with their missions. And then also
• 13:55
  Speaker 3: religious institutions that file shareholder resolutions to urge company and
• 14:00
  Speaker 3: their portfolios to meet strong ethical and governance standards. There
• 14:05
  Speaker 3: are many, many more types of investors out there that
• 14:08
  Speaker 3: are going to choose to follow this investment style. But
• 14:11
  Speaker 3: I think a lot of times we really just hear
• 14:13
  Speaker 3: about that normal investor or oh maybe pension funds that
• 14:18
  Speaker 3: align their focus with ESG interests. But honestly, it's so
• 14:23
  Speaker 3: many individuals, so many different institutions that might choose to
• 14:27
  Speaker 3: do this, and that's why there's so much invested in
• 14:30
  Speaker 3: it right now. So investors who are interested in ESG
• 14:34
  Speaker 3: may select investments based on company's revenue sources and business
• 14:38
  Speaker 3: practices that align with their values. An example of a
• 14:42
  Speaker 3: person who is passionate about the environment may be inclined
• 14:45
  Speaker 3: to invest in wind and solar companies. Or if you
• 14:49
  Speaker 3: care about supporting the advancement of women, you might have
• 14:52
  Speaker 3: some funds that invest in women owned companies. Someone investing
• 14:56
  Speaker 3: in this way may either actively eliminate or select investm
• 15:00
  Speaker 3: according to specific ethical guidelines. Obviously, since everyone has different values.
• 15:06
  Speaker 3: Each investor might choose different ESG investments in various ways.
• 15:11
  Speaker 3: The bottom line, though, is many more investors today do
• 15:15
  Speaker 3: want to see their money go towards stocks and funds
• 15:18
  Speaker 3: that are both profitable and reflect their social values.
• 15:21
  Speaker 1: Really great to hear about these different options for folks,
• 15:24
  Speaker 1: and we're actually going to talk a little bit about
• 15:26
  Speaker 1: some of the different types of funds and investments that
• 15:28
  Speaker 1: are out there. We're gonna get those details in just
• 15:30
  Speaker 1: a moment. In the meantime, if you haven't been to
• 15:32
  Speaker 1: the website costs financial dot com, urge you to head
• 15:34
  Speaker 1: on over there right now. It's coss k l aa
• 15:37
  Speaker 1: S Financial dot com. You can learn more about COSS
• 15:39
  Speaker 1: Financial the team. You can also learn as well about
• 15:41
  Speaker 1: their separate divisions. Whether it's your self or you're an
• 15:44
  Speaker 1: employer looking for some options, you can learn more at
• 15:47
  Speaker 1: clossfinancial dot com and of course sign up for the
• 15:49
  Speaker 1: weekly Market Pulse newsletter. Again, the website coss k l
• 15:53
  Speaker 1: aa S Financial dot com and their telephone number six
• 15:56
  Speaker 1: soh eight four four two five six three seven no
• 15:59
  Speaker 1: charge for the shell gets no you appointment tech Loss
• 16:01
  Speaker 1: Financial it will be complementary to you. Again, their number
• 16:04
  Speaker 1: six oh eight four four two five six three seven.
• 16:07
  Speaker 1: We'll continue your conversation with Malia and Josh. Next has
• 16:09
  Speaker 1: Money in Motion with Class Financial continues right here on
• 16:12
  Speaker 1: thirteen ten wiv A talking with our retirement planning professionals
• 16:19
  Speaker 1: from Class Financial, Malia Quavis and Josh Stirling. The website
• 16:22
  Speaker 1: Class financial dot com. That's coss k l aa S
• 16:26
  Speaker 1: Financial dot com. They're telephone number six oh eight four
• 16:29
  Speaker 1: four two five six three seven. No charge for the
• 16:32
  Speaker 1: financial gets no You appointment tech loss Financial. It will
• 16:34
  Speaker 1: be complementary to you again their number six oh eight
• 16:37
  Speaker 1: four four two five six three seven. Talking this week
• 16:40
  Speaker 1: about ESG investing. If you missed any part today's program donever,
• 16:44
  Speaker 1: you can always listen back to the podcast at classfinancial
• 16:47
  Speaker 1: dot com. You can also share it there as well.
• 16:49
  Speaker 1: If there's somebody that you think might might benefit from
• 16:52
  Speaker 1: the show or something that caught your interest on any
• 16:53
  Speaker 1: of the programs again, just head on over to classfinancial
• 16:56
  Speaker 1: dot com. You can listen to the podcast right there
• 16:58
  Speaker 1: and their telephone number six oh eight four four two
• 17:00
  Speaker 1: five six three seven. No charge for the initial get
• 17:03
  Speaker 1: to know you appointment that Class Financial. It will be
• 17:05
  Speaker 1: complementary to you again they're number six, soh eight four
• 17:07
  Speaker 1: four two, five, six three seven. So let's talk some
• 17:11
  Speaker 1: numbers here. How big has ESG investing grown and how
• 17:14
  Speaker 1: many different types of funds or investments are currently out
• 17:17
  Speaker 1: there for folks for investors, and when it comes to
• 17:20
  Speaker 1: that ESG space Malaya.
• 17:22
  Speaker 2: Yeah, so ESG investing has really grown exponentially over the
• 17:26
  Speaker 2: past few years. Our most current numbers still waiting for
• 17:30
  Speaker 2: reports to come out of twenty twenty three, but we
• 17:33
  Speaker 2: have to go back to twenty twenty two. According to
• 17:36
  Speaker 2: the US SIF, which is a sustainable investment foundation, there
• 17:41
  Speaker 2: were four hundred and forty four mutual funds available and
• 17:45
  Speaker 2: one hundred and seventy seven ETFs with ESG funds. So
• 17:49
  Speaker 2: together with investment companies, there was about eight point four
• 17:53
  Speaker 2: trillion dollars invested in sustainable investments in the US alone,
• 17:58
  Speaker 2: and that makes up about thirteen percent of all US
• 18:00
  Speaker 2: assets that are professionally managed. So this is nothing to
• 18:04
  Speaker 2: sneeze at as far as the amount of inputs that
• 18:07
  Speaker 2: have gone into this type of investing. The pandemic and
• 18:11
  Speaker 2: obviously climate friendly federal investments helped boost the momentum, showing
• 18:15
  Speaker 2: the financial appeal of these sustainable funds for investors, even
• 18:19
  Speaker 2: those that were focused more on financial return than impact,
• 18:23
  Speaker 2: So it goes hand in hand. So in the last
• 18:26
  Speaker 2: couple of years, ESG funds became less of a fringe category,
• 18:30
  Speaker 2: which Josh will talk a little bit about, and sustainable
• 18:33
  Speaker 2: stocks have gradually crossed into some more traditional funds. Global
• 18:39
  Speaker 2: investors are increasingly focused on ESG issues in their investment strategies,
• 18:45
  Speaker 2: as eighty nine percent of investors considered ESG factors in
• 18:49
  Speaker 2: some of their investment approach globally and in twenty twenty
• 18:53
  Speaker 2: two specifically according to the Capital Group study, and about
• 18:58
  Speaker 2: ninety percent of companies have either developed a formal strategy
• 19:03
  Speaker 2: to manage corporate, environmental, social and government practices, they already
• 19:09
  Speaker 2: have or they're in process. So one thing we did
• 19:14
  Speaker 2: see and I know for sure in twenty twenty three,
• 19:18
  Speaker 2: and Josh can come on this, we did see outflows
• 19:21
  Speaker 2: from ESG funds, but we also saw subsequently lots of inflows,
• 19:26
  Speaker 2: so he can speak to that as well. But it's
• 19:29
  Speaker 2: always a moving issue. It's always a moving investment pile
• 19:33
  Speaker 2: of money, but very interesting to see the traction that
• 19:36
  Speaker 2: has grown and the amount of funds that are available
• 19:39
  Speaker 2: out there.
• 19:40
  Speaker 1: It's always good too to feel good about where you're
• 19:42
  Speaker 1: investing in how you're investing, and kind of having those
• 19:45
  Speaker 1: shared values. Really fascinating this stuff this week, as always,
• 19:49
  Speaker 1: from our retirement planning professionals from Class Financial, the website
• 19:52
  Speaker 1: cossfinancial dot com. That's k l a a s Financial
• 19:55
  Speaker 1: dot com and their telephone numbers six so eight, four
• 19:58
  Speaker 1: four two, five six three. Don't forget no charge for
• 20:01
  Speaker 1: the initial gets to know you appoyment tech Loss Financial.
• 20:03
  Speaker 1: It will be complementary to you again their number six
• 20:06
  Speaker 1: oh eight four four two five six three seven. We
• 20:09
  Speaker 1: got the what, We've got the why, what about the who?
• 20:11
  Speaker 1: We'll get the details next. As Money in Motion with
• 20:14
  Speaker 1: Coss Financial continues right here on thirteen ten. WIBA join
• 20:20
  Speaker 1: this week by Malia Quavis and Josh Stirling. They are
• 20:23
  Speaker 1: our retirement planning professionals from Class Financial. The website for
• 20:27
  Speaker 1: COSS Financial, it's just that cossfinancial dot com. Real easy
• 20:30
  Speaker 1: to remember. That's Coss k l aas Financial dot com.
• 20:34
  Speaker 1: Great website to learn more about COSS Financial, learn about
• 20:36
  Speaker 1: the team, learn about their separate divisions. Also sign up
• 20:39
  Speaker 1: to the weekly Market Pulse newsletter again that available to
• 20:42
  Speaker 1: you at Cossfinancial dot Com telephone number six oh eight
• 20:45
  Speaker 1: four four two five six three seven. No charge for
• 20:48
  Speaker 1: the initial gets to know your appointment Tech Loss Financial.
• 20:51
  Speaker 1: It will be complementary to you again their number six
• 20:53
  Speaker 1: oh eight four four two five six three seven. Talking
• 20:57
  Speaker 1: this week about ESG and vest and Josh, as we
• 21:01
  Speaker 1: kind of work our way through this, who should be
• 21:05
  Speaker 1: considering whether ESG investing is right for them? Who are
• 21:08
  Speaker 1: the people that this is really really interesting to.
• 21:12
  Speaker 3: Yeah, well, Sean to your point, and to be quite frank,
• 21:17
  Speaker 3: ESG investment. It might not be for everybody, and it
• 21:20
  Speaker 3: might not be an interest for everyone, but it is
• 21:23
  Speaker 3: a form of investing that's attracting a lot of individuals
• 21:26
  Speaker 3: over to it. Today. There are tens of thousands of
• 21:30
  Speaker 3: companies that people might want to invest in, and they
• 21:33
  Speaker 3: might want to consider factors just beyond the returns. So
• 21:37
  Speaker 3: for people choosing to invest in sustainable investments, they should
• 21:41
  Speaker 3: be aware that there could be lower returns. While the
• 21:45
  Speaker 3: data on this type of investing shows varying degrees of
• 21:49
  Speaker 3: performance over the past twenty thirty forty plus years, sometimes
• 21:53
  Speaker 3: we see that ESG may underperform normal investments. You might
• 21:57
  Speaker 3: wonder why sustainable invest does cost more to implement. While
• 22:03
  Speaker 3: these costs are coming down significantly, there is still a
• 22:07
  Speaker 3: noticeable increase compared to non ESG investments. And this makes sense,
• 22:11
  Speaker 3: of course, because there's more that's going into it. There's
• 22:14
  Speaker 3: more work to identify factors across the three ESG arms,
• 22:20
  Speaker 3: and that kind of work rolls up into the overall
• 22:22
  Speaker 3: cost of the solution that's offered, whether that's ETFs, mutual funds.
• 22:28
  Speaker 3: That all rolls into the more cost, more labor that's
• 22:31
  Speaker 3: going into it, more data feeds that need to come over.
• 22:34
  Speaker 3: So cost is a pretty logical explanation. But then sustainable
• 22:39
  Speaker 3: investing might also exclude an investment that performs really well
• 22:44
  Speaker 3: in a normal portfolio. However, on the flip side, it
• 22:48
  Speaker 3: might also exclude an investment that loses value. So that's
• 22:51
  Speaker 3: kind of where the performance metric it can be hit
• 22:55
  Speaker 3: or messed, depending on what report you're looking at, what
• 22:59
  Speaker 3: kind of history timeframe you're looking at. The flows that
• 23:03
  Speaker 3: are coming into funds can definitely help prop up different
• 23:06
  Speaker 3: companies and whatnot, But there's still more to learn about
• 23:09
  Speaker 3: how ESG investing impacts the overall returns. When we compare
• 23:14
  Speaker 3: it directly to traditional investments. So, as individuals have been
• 23:20
  Speaker 3: focusing more on ESG investing, research companies have worked to
• 23:25
  Speaker 3: make ESG related data more accessible and accurate for those
• 23:29
  Speaker 3: individuals when they go and select ESG. So we can
• 23:34
  Speaker 3: talk a little bit about how an individual might want
• 23:37
  Speaker 3: to go and implement ESG. And a lot of times
• 23:40
  Speaker 3: you can go out and you can implement it on
• 23:42
  Speaker 3: your own. You can go out and you can select
• 23:44
  Speaker 3: many of the hundreds and thousands of different options mutual funds,
• 23:48
  Speaker 3: ETFs and choose those to build out their own portfolio.
• 23:53
  Speaker 3: But how would you consider choosing an advisor or an
• 23:57
  Speaker 3: investment manager to help you identify a best ESG portfolio
• 24:02
  Speaker 3: put together? And I think when you go out and
• 24:05
  Speaker 3: you interview different advisors and that is a core interest
• 24:09
  Speaker 3: of what you want to do. Aside from just simply
• 24:12
  Speaker 3: financial planning, The first and foremost question that you should
• 24:15
  Speaker 3: be asking is is do you simply do ESG investing?
• 24:20
  Speaker 3: Because there are many firms out there that that don't
• 24:23
  Speaker 3: offer ESG investing. Like I said, it does offer extra cost,
• 24:29
  Speaker 3: it does take practice to actually implement it into your
• 24:32
  Speaker 3: your core business model, and it's something to simply evaluate
• 24:36
  Speaker 3: if it's just even an option with the firm that
• 24:38
  Speaker 3: you're working with or you're interviewing. And then once you
• 24:42
  Speaker 3: go beyond just do you offer ESG investments, then ask
• 24:47
  Speaker 3: what do they kind of concentrate on, what they what
• 24:50
  Speaker 3: are they focusing on. Many different firms can have different
• 24:53
  Speaker 3: varying degrees of what kind of ESG investing they offer
• 24:57
  Speaker 3: for and clients, and so they could have individuals or
• 25:02
  Speaker 3: portfolio managers that go out and build out super customize
• 25:06
  Speaker 3: for every individual client, or you could have an advisor
• 25:10
  Speaker 3: that just says, oh, this is an ESG investment. We
• 25:12
  Speaker 3: just went out and picked a couple of funds and
• 25:14
  Speaker 3: we think it looks really good. And then you can
• 25:17
  Speaker 3: have some that are a little bit more in the middle,
• 25:20
  Speaker 3: and that's kind of where we align. So I'll explain
• 25:22
  Speaker 3: what we do here just to kind of give a
• 25:26
  Speaker 3: good picture on that. So the way that we develop
• 25:29
  Speaker 3: our ESG portfolios is really focusing on climate change. So
• 25:35
  Speaker 3: we do concentrate on the entire package of ESG environmental
• 25:38
  Speaker 3: social governance. We track it very closely. We make sure
• 25:42
  Speaker 3: that we're hitting marks of where we want to be
• 25:44
  Speaker 3: on all of our metrics. When it comes to ESG investing.
• 25:48
  Speaker 3: But the one key thing, the one theme that we
• 25:50
  Speaker 3: really concentrate a lot on, and we find that a
• 25:53
  Speaker 3: lot of our clients so we work with also aligned
• 25:55
  Speaker 3: with this really well is climate impact. So that carbon
• 25:59
  Speaker 3: emission that we talked about earlier today, that's one of
• 26:03
  Speaker 3: our main focuses is reducing the carbon emissions compared to
• 26:08
  Speaker 3: our benchmark that we're tracking, and in our ESG portfolio,
• 26:12
  Speaker 3: we're able to reduce carbon emissions by fifty percent, and
• 26:16
  Speaker 3: that's a figure that drives a lot of our clients
• 26:19
  Speaker 3: towards the ESG solution instead of maybe the more traditional
• 26:24
  Speaker 3: financial portfolios. Now, all that being said, one of our
• 26:29
  Speaker 3: main focuses here is to build an ESG portfolio that
• 26:33
  Speaker 3: is climate focused, but we also want to make sure
• 26:36
  Speaker 3: that a lot it aligns financially with our portfolios, So
• 26:39
  Speaker 3: we try to make it as close as possible to
• 26:42
  Speaker 3: our more traditional portfolios that we have developed, but then
• 26:46
  Speaker 3: also create that thematic approach towards ESG and climate change.
• 26:52
  Speaker 3: So those have been really beneficial. We've seen a lot
• 26:55
  Speaker 3: of clients really really latch onto that and come in
• 26:58
  Speaker 3: and use that investment and see a lot of value
• 27:01
  Speaker 3: in that. So uh, if you are interested in learning
• 27:06
  Speaker 3: more about this, you can go out and speak to
• 27:08
  Speaker 3: your own financial advisor or your investment manager, or if
• 27:13
  Speaker 3: you want to evaluate other managers, or you want to
• 27:16
  Speaker 3: see how we do our ESG portfolios a little bit more,
• 27:20
  Speaker 3: you can reach out to COSS Financial and one of
• 27:22
  Speaker 3: our advisors can speak more about this and see if
• 27:24
  Speaker 3: it's right fit for you.
• 27:25
  Speaker 1: Really great information this week, really intriguing stuff as well.
• 27:29
  Speaker 1: If you've got questions, don't forget that initial get to
• 27:31
  Speaker 1: know you appointment at Costs Financially. It will be complementary
• 27:33
  Speaker 1: to you. I got to just pick up phone, get
• 27:35
  Speaker 1: a call six oh eight four four two five six
• 27:37
  Speaker 1: three seven. The website for COSS Financial it is cossfinancial
• 27:41
  Speaker 1: dot com. That's k l aas Financial dot com. And
• 27:44
  Speaker 1: again the telephone number six oh eight four four two
• 27:46
  Speaker 1: five six three seven. No charge for that initial get
• 27:49
  Speaker 1: to know you appointment at COSS Financial. It will be
• 27:51
  Speaker 1: complementary to you. Want to hold on to that number
• 27:53
  Speaker 1: as well. Because it's time now for the Coss Quiz
• 27:56
  Speaker 1: Question of the week. Works like this, just a moment,
• 27:57
  Speaker 1: I'll ask you the class quiz question of the week.
• 27:59
  Speaker 1: Then I have thirty minutes from the today's program to
• 28:01
  Speaker 1: call the Class Financial Office right here in Madison at
• 28:04
  Speaker 1: six oh eight four four two five six three seven.
• 28:06
  Speaker 1: If you are the first call with correct answer to
• 28:08
  Speaker 1: win this week's prize, which is a twenty five dollars
• 28:10
  Speaker 1: gift card to Cabela's. This week's COLSS quiz question of
• 28:14
  Speaker 1: the week is this true or false? According to the
• 28:17
  Speaker 1: Global Sustainable Investment Review, in twenty twenty two, there was
• 28:22
  Speaker 1: over thirty trillion dollars invested globally in ESG focused investments.
• 28:28
  Speaker 1: Telephone number six oh eight four four two five six
• 28:31
  Speaker 1: three seven. First call with correct answer when a twenty
• 28:33
  Speaker 1: five dollars gift card to Cabella's. And again that's COSS
• 28:36
  Speaker 1: Financials Office right here in Madison, that number six oh
• 28:39
  Speaker 1: eight four four two five six three seven. Malia Josh,
• 28:42
  Speaker 1: It's always great chatting with both of you, always an
• 28:44
  Speaker 1: interesting conversation. You guys, enjoy this beautiful day.
• 28:47
  Speaker 3: Thanks Sean, Thanks Sean.
• 28:49
  Speaker 1: Doctor Mardy Greer comes your way next right here on
• 28:52
  Speaker 1: thirteen ten, Wiba