The Three Reasons Why Women Need To Consider ESG Investing
There are three compelling reasons why women need to consider ESG investing and
creating an ESG portfolio. First, what is an ESG portfolio?
E – Environmental
If you’re investing in an ESG portfolio and you care strongly about climate change, you
want to invest in companies that are doing their part to get us to a better place. Invest in
companies that are looking at alternate sources of fuel. We are trying to influence
companies to look at other sources of fuel so that eventually we can get away from oil.
That’s an example of an environmental portfolio.
S – Social
Social would be things like how the company is treating its employees and customers.
Social factors have really taken on a new spin with COVID-19. Are the companies you
invest in forcing their employees to go to work? If they are, those employees are risking
their lives! That’s an example of the social part of ESG. We want to inform companies
and advocate that these are the things we believe in, and we want to support
companies that are doing that.
G – Governance
When it comes to executive compensation, does it feel fair? How long do board
members stay on board? We find that the longer board members are on a board, the
more likely that corruption or collusion could occur. Is there gender parity on a board?
Sometimes, all it takes is an economic risk to make a change in governance – our
dollars speak!
With all that said, why should women invest in an ESG portfolio?
Women are now directing the economy.
Not only are women generating, managing, and inheriting an ever-increasing amount of
wealth, they are also directing the economy itself. For instance, women are majority
owners of 9.9 million U.S. businesses of all sizes. Women can use their increasing
amount of wealth and economic control to invest in companies that align with their values.
Women are controlling a majority of wealth.
51% of the personal wealth in the U.S. is controlled by women – an estimated $22
trillion worth. Plus, this number is expected to jump drastically! Over the next forty
years, this number will increase 30% to nearly $29 trillion as intergenerational wealth is
handed over. The more women understand how much wealth we actually have, the
more we can gain confidence and embrace our own power in terms of wealth.
Women live longer than men.
Boomer women live longer than their husbands. This difference is due to an inherent
biological advantage for the female, but it also reflects behavioral discrepancies
between men and women. Women are getting a massive inheritance at widowhood
from their husbands, where the money is in their control alone. The wealth is transferred
from the Boomer man to the Boomer women. Now, Boomer women have a
disproportionately large amount of wealth – they can invest that money into an ESG
portfolio, and ultimately invest in a better future for their children and grandchildren.
Own Your Own Finances!
Overall, decide which aspects of ESG are the most important things that you care
about. Then, do not invest in companies who are doing the things that harm your cause.
Instead, invest in actively responsible companies. Eventually, you will create an ESG
portfolio. We can discover the influential role of environmental, social, and governance
(ESG) Investing when we look beyond traditional philanthropy and political activism. We
need to OWN our own finances and embrace our own power when it comes to wealth.
References:
“The New Face of Wealth and Legacy: How Women Are Redefining Wealth, Giving and
Legacy Planning.” RBC Wealth Management. Link
“51% of Personal Wealth in the U.S. is controlled by Women.” ConsueloMacWealthTrack. Link
“Female Life Expectancy.” World Health Organization. Link