Investments that align with your values.

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.

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Why invest in a Socially Responsible Investment portfolio?

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
  • Sustainabilty

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 Attributes

U.S. Equities

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

Exclusionary Filters (negative screens)
across individual U.S. stocks

Energy sector

Tobacco

Adult entertainment

Gambling

Small arms

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

Inclusionary Filters (positive screens)
across individual U.S. stocks

Best-in-class approach, focusing on companies with higher ESG percentiles relative to peers. Average ESG percentile is greater than 90%.

ESG scores relative to broader U.S. stock universe:

Corporate Governance+20.4% Stronger
Access to Basic Services+190.0% Stronger
Business Ethics+33.0% Stronger
Community Relations+217.5% Stronger
Data Privacy and Security+25.8% Stronger
Emissions, Effluents and Waste+127.7% Stronger
Carbon - Own Operations+103.8% Stronger
Environment and Social Impact of Products and Services+163.3% Stronger
Human Rights - Supply Chain+78.4% Stronger
Human Capital (e.g. diversity, non-discrimination, etc)+54.3% Stronger
Land Use and Biodiversity+252.0% Stronger
Occupational Health and Safety+101.6% Stronger
Product Governance+77.1% Stronger
Resource Use+182.0% Stronger
Powered by Sustainalytics
As of 12/31/19. Outperformance calculated by dividing portfolio score on each relative metric by score for the broader US stock universe.

Foreign Equities

A set of diversified ESG-optimized ETFs are used for exposure to foreign developed and emerging market stocks.

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. 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 https://dash.harvard.edu/bitstream/handle/1/14369106/15-073.pdf?sequence=1&isAllowed=y

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.

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