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Socially Responsible Investing

Invest toward a more sustainable future.

Our Socially Responsible Personal Strategy (SRI) is a way for you to support and invest in companies more proactively managing environmental, social, and corporate governance related issues, also known as ESG. Ready to put new energy in your portfolio? It’s easy to get started.

Already a client?  to set up a call.

Socially Responsible Investing

“It’s so easy to opt into something that could have such a big impact.”

— 

Katie Z.

Wealth Management Client since 2019*

Our Socially Responsible Personal Strategy (SRI), also known as ESG, is a way for you to support and invest in companies more proactively managing environmental, social, and corporate governance related issues. Ready to put new energy in your portfolio? It’s easy to get started.

Already a client?  to set up a call.

*Katie is a wealth management client and
was not paid to provide this testimonial.

Why invest in a Socially Responsible Investment portfolio?

What is Socially Responsible Investing?

For many, socially responsible investing is a way to align their investments with their personal values and beliefs. ESG factors have also been proven to be financially material to a company's bottom line. Numerous studies have shown companies rating higher on material ESG issues tend to be more profitable and produce stronger financial results. Additionally, some studies show higher rated ESG companies could also lead to better portfolio returns over time1.

  • It's a way to align your investments with your personal values and beliefs.

  • There is the potential for improved risk management.

What are ESG rankings?

E, S, and G represent the three main pillars used to evaluate the “social responsibility” of companies.

Environmental

  • Climate Change
  • Renewable Energy
  • Sustainability

Social

  • Diversity
  • Labor Relations
  • Conflict Minerals

Governance

  • Management Structure
  • Board Independence
  • Executive Compensation

There is no global standard for evaluating ESG metrics, but some third-party firms have established ranking methodologies. Personal Capital chooses to partner with Sustainalytics, a global leader in ESG research and ratings. To learn more about Sustainalytics’ approach, read our Socially Responsible Investment methodology.

Our Socially Responsible
Personal Strategy

We use a combination of exclusive and inclusive filters, which allow us to avoid controversial categories and simultaneously seek out companies more proactively managing ESG issues. And given our use of individual stocks, it can offer greater tax efficiency and opportunities for customization than off-the-shelf mutual funds and ETFs.

Socially Responsible Personal Strategies include all the benefits of our Personal Strategy® approach, including optimal asset class mixes that aim to maximize return and reduce risk, our Smart Weighting™ methodology within U.S. equities, tax management, and disciplined rebalancing.

The incorporation of ESG metrics primarily applies to the U.S. and International Equity asset classes within the portfolio.2

Key Portfolio Characteristic

U.S. Equities

Best-in-Class Approach

Average ESG percentile target of 90% amongst individual U.S. stocks.

Inclusive Filters

Positive Screens

Basket of ESG optimized stocks used for exposure to mega-cap, large-cap, and mid-cap segments of the U.S. equity market.

Due to more limited scoring data, small-cap stocks are represented by a mix of traditional diversified low-cost ETFs.

Exclusive Filters

Negative Screens

Removed from U.S. equity individual stocks:

  • Energy sector
  • Tobacco
  • Adult entertainment
  • Gambling
  • Small arms

Additional Benefits

  • Optimal asset class mixes
  • Smart Weighting methodology within U.S. equities
  • Tax management
  • Disciplined rebalancing

Our individual US stocks demonstrate stronger management of ESG issues, including:

  • Carbon Intensity

  • Environmental Policies

  • GHG Reduction Programs

  • Diversity Programs

  • Health & Safety Management Systems

  • Data Privacy & Security Policies

  • Bribery & Corruption Programs

  • Political Involvement Policies

  • Whistleblower Programs

  • *Powered by Sustainalytics, data as of 12/31/2020. ESG issues scored against US universe of mid, large, and mega cap stocks.

Foreign Equities

A set of diversified ESG-optimized ETFs are used for exposure to foreign developed and emerging market stocks. Due to a lack of viable investment options, a traditional (non-ESG) ETF is used for international small-cap equities.

Disclaimer: The details described above are reflective of our offering that incorporates individual U.S. stocks. This offering is reserved for portfolios with at least $200,000 in value. Due to limited scoring data and a lack of low cost/liquid ETFS, all asset categories outside of mega cap, large cap, and mid cap US equities are not ESG-optimized in the Socially Responsible Personal Strategy. We also offer an all-ETF socially responsible strategy, but it comes with its own set of unique characteristics not described on this website. For more details on either offering, please contact an advisor.

1. Corporate Sustainability: First Evidence on Materiality

2. Due to more limited scoring data, U.S. and International small-cap stocks are represented by a mix of traditional non-esg optimized low-cost ETFs.

Read more about SRI

Read more about SRI

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