The Anatomy of a Cook Wealth ESG Portfolio

by | Apr 14, 2022 | Investing

If you’re an impact-focused investor, you may be wondering what exactly goes into an environmental, social, and governance-conscious portfolio. Every advisor has their own approach, but at Cook Wealth, we focus on three main initiatives: Sustainable energy, clean water, and zero-carbon technology. These are the three pillars of our ESG strategy. 

When companies use sustainable energy, develop zero-carbon technology, and promote clean water, humanity flourishes

That’s our goal here at Cook Wealth: to invest responsibly so that both people and the planet benefit from our investments. 

Within sustainable energy, the companies we look for are those using wind and solar power. It’s clean, less polluting, and is the future of energy. These companies are helping the planet and setting themselves up for long-term viability. 

Zero-carbon technology can refer to a few different things, like the use of autonomous vehicles to reduce greenhouse gases, shifting to clean technology, and utilizing carbon credits. 

Why these specific initiatives? We believe that a healthy environment and access to clean water are the first steps towards a flourishing humanity. 

With ESG investing, you can do well by doing good

In our investment model, a portion of your finances are allocated to funds that are broadly ESG-conscious. The companies in these funds score highly on a variety of ESG metrics, like environmental impact and gender equality. The other portion goes into funds that have direct, sustainable impact on the three pillars of our ESG strategy. When we look at highly-targeted funds to include in your ESG portfolio, we’re looking for funds with companies that are actively working towards improving water quality and access, tapping into sustainable energy sources, and developing zero-carbon tech. 

That’s why our custom-tailored ESG investing strategy is even more effective and impactful than a traditional strategy. 

Beyond choosing specific funds, we also keep you diversified. Within the pillars of sustainable energy, clean water, and zero-carbon technology, we’ll look for funds that include large-, mid-, and small-cap companies, as well as international companies and emerging markets. Investing responsibly doesn’t mean you have to sacrifice stability or returns. 

How we protect you from greenwashing

It’s hard to talk about ESG investing without acknowledging one unfortunate fact: Every major company has an entire sustainability department pouring millions of dollars into PR and positive marketing. It’s called “greenwashing,” and it’s increasingly common. For the average investor, it can be difficult to tell truly well-intentioned companies from those that are using the ESG stamp of approval to boost public opinion. Those hundred-plus-page environmental reports can be deceptive. So many investors are at best cautious of ESG metrics and at worst, avoid ESG investing altogether.  

We agree, some highly rated ESG companies aren’t doing what they say they are. But we believe ESG investing is worth the attention it’s getting. Even an incremental step in the right direction is an important step. When companies are spending billions of dollars to capture the attention of modern investors, at least a little bit of good will come from it. And that’s a win for everyone. 

But that doesn’t mean we won’t try our best to focus on companies that walk the talk. At Cook Wealth, our advisors also know what to look for when choosing ESG funds. There are a number of research sites we visit when building an ESG-conscious portfolio. Together, these sites paint the whole picture of how a company approaches ESG and if they’re being truly transparent about their practices. When building your portfolio, we use four trusted ratings agencies that compare companies across dozens of different metrics. We can show our clients how each fund ranks, what companies are included in that fund, and exactly how it fits into our three-pillar strategy. We do our best to target the companies that are really moving the needle. We don’t have a crystal ball, but we do our best to support the companies that are doing things the right way, for people and for the planet.  

We offer ESG investing services to our clients at no extra cost

We have a unique partnership with our clients. We work one-on-one with every client to match their passions with wise investments. Every client brings their own values and experiences to the table. We do everything we can to match your investments to those needs, while maximizing your potential returns. If we can’t find an ESG fund that directly influences the causes you care about most, we’ll work together to develop a joint investment and charitable giving strategy that keeps your finances in balance but mirrors your values. And these additional ESG services are complimentary for our clients.  

Is it extra work for us to build an ESG portfolio? Yes… But we believe you do well by doing good. We’re willing to take the time to build a strategy that does more than offer strong returns.

ESG investing is not a passing trend

This is where the future of money is going. Renewable energy, equity, innovation, technology, and clean water… We should be investing in the companies that will be around when our kids and grandkids start investing. It’s not going to be coal or oil. It’s going to be the innovators of today who are already developing technology and growing with clean, sustainable, human-centric practices. The companies we’ll see decades from now are the companies that are putting the planet and people first. When you do that, the profits will follow.

Have more questions about socially-conscious investing or want to work with one of our advisors? Grab a 15 minute spot on my calendar, or send us a message below.

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