While the language and nuances of investing with an environmental, social, and governance (ESG) lens continues to cause confusion, there is no question that its influence has taken root. We see an increasing number of financial advisors tackling the challenge of how to capture their sustainable investing approach – and how to communicate it clearly to clients.
In a recent article in Financial Planning Magazine, How to Nail the ESG Conversation with Clients, Longview’s Evan Zall says it best:
“When it comes to sustainable investing, financial advisors (yet again!) find themselves at a crossroads…Firms large and small struggle with the issue of how to talk to clients about ESG.
“As we enter 2024, a wide cross-section of investors expect access to financial options that consider environmental, social and governance factors. The hard part? Figuring out not only how to incorporate sustainable investing vehicles, but also how to address the offering with clients in a way that is honest, informed, and brings value to the business.”
Evan covers three considerations for getting the message right so advisors can communicate about sustainable investing:
- Get to know the basics of ESG
- Understand the “why” behind your services
- Link your communications to your clients’ goals and values
Communicating about sustainable investing is only going to become more important for financial advisors in the coming years. Consider that a recent Morgan Stanley survey found that more than half of investors plan to increase allocations to sustainable investments in the next year, and nearly 80 percent are interested in investing to achieve market-rate financial returns while also considering positive social or environmental impact.
Those are staggering statistics. Advisors that offer vehicles for those investors should be focused on how they can clearly, effectively, and authentically communicate about sustainable investing.
Our team has been working with clients on this challenge for more than a decade, and you can contact us any time with questions.
