What is Values-Based Investing?
Access to investments that produce attractive risk-adjusted returns is a requirement common to all investors, regardless of their unique portfolio needs. Any quality investment must be first and foremost focused on the return and risk to investors. A values-based investment philosophy is no different.
Values-based investing introduces a second potential return to investors: impact across a range of social, environmental, and economic aspects. It offers investors the opportunity to partner with difference-makers to create intentional and measurable impact in communities in the US and around the world. We believe the UN's Sustainable Development Goals are a great filter for our product platform.
Traditional investment theory eliminates emotion and passion from the investment decision making process. What results is typically a cold and joyless relationship with the money that investors have worked so hard to amass. Values-based investing, on the other hand, invites investors to joyfully consider their passions and values when deploying their capital into the world.
What Values-Based Investing is Not
Values-based investing is not just another word for charity. CommonGood and others operating in this investment philosophy are fundamentally focused on bringing to market 'good deals that do good'. These investments are being made into for-profit businesses and strategies that are seeking to maximize returns. The difference is that they, and we, are also cognizant of the good that business can do and the impact it can have on our communities and the world
Some investors believe that you can't have your cake and eat it too - i.e. invest for attractive risk-adjusted returns and also for impact. We, and the trillions of dollars in institutional capital already investing in this manner, disagree. Instead, values-based investing may contribute to overall superior returns via taking a long term approach, considering all stakeholders, and understanding that a business is much more than just its financial bottom line.
Aligned with the UN Sustainable Development Goals
The United Nations, in cooperation with stakeholders around the world, has created the Sustainable Development Goals, which seek to achieve 17 development outcomes on a global basis. Ranging from the eradication of poverty to the provision of quality education for all, the SDGs provide a helpful framework for investors and asset managers to focus their efforts. CommonGood evaluates investment opportunities through the lens of the SDGs, searching for those that allow investors to participate in the realization of these important global goals.