ESG & Values-Based Investing
Applying environmental, social, governance, or religious criteria to investments.
What is ESG & Values-Based Investing?
Negative screening excludes industries (tobacco, weapons, fossil fuels). Positive screening favors companies with strong practices. Faith-based investing applies religious criteria. These are nonfinancial considerations: an adviser must document and honor them, and disclose how they may affect diversification or return.
ESG & Values-Based Investing: a worked example
A client excludes alcohol and gambling stocks for religious reasons; the adviser uses a screened fund.
More terms in Clients, Strategy & Tax
Sole Proprietorship
A business owned by one person with no legal separation from the owner.
General Partnership
Co-owners share management and unlimited liability; income passes through.
Limited Liability Company (LLC)
Limited liability for owners with pass-through taxation by default.
C Corporation
A separate taxpayer - profits taxed at the corporate level, then again as dividends.
S Corporation
A corporation that passes income through to shareholders, avoiding double tax.
Trust & Estate Accounts
Accounts run by a fiduciary - a trustee or an executor - under a governing document.
Foundations & Charities
Tax-exempt organizations investing for a mission, often in perpetuity.
Client Profile & Data Gathering
The financial and nonfinancial facts every recommendation must rest on.