Frequently Asked Questions
What do “SRI” and “ESG” stand for?
“SRI” stands for socially responsible investing, which is a term used by investors who consider the environmental, social, and governance (“ESG”) practices of the businesses in which they invest or prefer to avoid.
What is Shareholder Advocacy?
When you own an individual stock you the right to vote for certain things related to that company. When you hold a mutual fund or ETF, the fund/investment company will do that for you. In traditional investments, you can expect your votes to be counted towards whatever management supports. With some of the mutual funds and ETFs we use, your votes will be cast to support things such as increasing diversity of board members and executives, decreasing carbon footprint, corporate transparency, improving supply chain management, etc
Additionally, many of the investment we use actually work directly with publicly traded companies to make these changes on their own, through shareholder engagement or at least get certain propositions on the ballots.
In all, some of the funds’ management fees go to more than just the bottom line of the fund companies.
Why should I invest responsibly?
Socially Responsible Investing (SRI) provides a real force for global, national, regional, and local change. A professionally managed SRI portfolio can help you realize your financial goals, while also increasing corporate accountability to all stakeholders and the environment.
In addition, clients can support investment that can have a direct impact on local communities by providing needed funding for housing, health care, small business development, and other initiatives.
What will be in my portfolio?
Responsible investors typically avoid, or “screen out,” certain companies or industries from their portfolios, such as fossil fuels, private prisons, defense contractors, tobacco, companies involved in animal testing, etc.
On top of the initial screens is an approach to invest in companies with a strong track record regarding diversity, labor relations, or other environmental, social and governance (ESG) practices, including supply chain management and reducing environmental footprint.
When appropriate you can also expect to have investments in Green Bonds specifically earmarked for environmental purposes, lowering the carbon footprint of a company, clean energy development or installation, and ending deforestation. You may also have exposure to community investment bonds that support such things as affordable housing, renewable energy projects, fair access to healthcare and healthy food, and sustainable agriculture.
Will investing responsibly hurt my financial returns?
Over the past 25 years, numerous studies have proved that in many cases, SRI portfolios have tracked and sometimes exceeded market benchmark performance over the long term.
Today, more investors than ever before are incorporating ESG factors into their investment strategies, as poor labor, environmental, and governance practices are seen as sources of potential investment risk. From our perspective, companies that mismanage ESG issues face greater risks related to regulatory violations, litigation, boycotts, and strikes.
What are my options as an SRI investor? Will I miss out on any types of investments?
We offer a wide range of investments and services for individuals, families, organizations, and institutions, including:
- Stocks – access to major markets and exchanges
- Bonds – tax free municipal, government, agency, corporate and convertible bonds
- Mutual funds and exchange traded funds – including a wide range of SRI/ESG mutual funds
- Portfolio management and third-party money management services
- Community-focused impact investment opportunities
How are your advisors compensated?
Greenleaf Investment Advisors are typically compensated through a fee on the assets we manage on behalf of our clients. Where appropriate for a small percentage of clients, we do offer some services compensated by a fee on transactions.
Your long-term financial security and long term relationship is the foundation of our business.
Is it difficult to begin investing with you, if I'm currently working with another advisor?
Engaging us to manage your portfolio isn't difficult. If you already have a financial advisor, we can work with them to ensure a smooth transition. Keep in mind that you don't need “permission” from your existing advisor before working with a new advisor. Well will walk you through the process of transferring your account, step by step. Once you've opened an account with us, we can take care of any necessary legwork as part of the transition.
Can you help me with my employer-sponsored 401(k) or 403(b)?
Our relationships enable us to work directly with some employer-sponsored retirement plans. Contact us to learn about the socially responsible options that may be available through your current 401(k) plan, the SIMPLE IRA offered by small businesses, or the 403(b) plans offered by nonprofits. We can also help you roll over retirement savings from your former job into a new SRI-focused rollover IRA – without tax penalties.
Past performance is not indicative of future results. Diversification seeks to reduce the volatility of a portfolio by investing in a variety of asset classes. Neither asset allocation nor diversification guarantee against market loss or greater or more consistent returns.