Podcast: Socially Responsible Investing with ESG Investments

By Mueller Financial Services, June 28, 2022

Investment Management / Podcast


Join Brian Erickson, Wealth Advisor, for a discussion on Socially Responsible Investing (SRI), now most commonly known as Environmental, Social, and Governance (ESG) Investing, and how you might be able to make a positive social impact with your investments.

Listen Now:

For more information, please contact:

Brian Erickson
Wealth Advisor

Episode Transcript:

[00:00:00] Emily: Hi everyone. You’re listening to “Managing Your Wealth: Your Vision, Our Guidance.” The Mueller Financial Services, Inc. podcast. I’m Emily, and today I’m with Wealth Advisor, Brian Erickson, who will be sharing some insight into sustainable investing or ESG investing. But before we begin, let’s do an introduction.

Brian joined Mueller Financial Services in 2020 with experience in financial services and wealth management for high-net-worth individuals. His focus is on helping clients pursue a “work optional” lifestyle and foster long-term independence through holistic financial planning, custom portfolio management, and risk analysis.

Brian, thanks so much for joining today’s podcast. Let’s dive into the questions! The first, what is ESG investing and what does it stand for?

[00:01:01] Brian: Yeah. Thanks, Emily! Thank you so much for having me on today. I’m excited to dive into the topic of ESG.

We have a lot to share with our listeners and there’s been a lot of talk about ESG recently, and some confusion on what it really is. But actually, ESG investing was introduced back in the 1960s as socially responsible investing, with investors, excluding stocks and industries based on practices, such as, tobacco stocks or companies involved in foreign conflict.

Socially responsible investing has evolved into a dynamic spectrum that we now call ESG, which stands for Environmental, Social, and Governance.

Environmental is how companies impact the natural environment with its operations, supply chain, and products. And social factors include how a company manages relationships with its employees, suppliers, customers, and community. Then governance is the policies and practices related to a company’s leadership, executive pay, and shareholder rights.

All three of these nonfinancial factors can be assessed to measure the sustainability or ethical impact of a company, and these factors help us better determine the future financial performance of a company.

Well-known financial research platforms like, Morningstar, have begun adding a sustainability rating for individual stocks and mutual funds that quantifies each of these ESG factors.

These are very positive changes for investors, as ESG information becomes more readily available and easily accessible, it will only help us make more well informed investment decisions.

[00:02:27] Emily: Expanding on that last statement, how or why does ESG matter on the investor level and beyond?

[00:02:37] Brian: ESG matters on multiple levels. First, on the investor level. ESG gives investors a separate lens to analyze a company. Financial data only tells part of a company’s story. But through this ESG lens, we can uncover and assess risks that may not have been seen in their financial statements.

For example, say a company is highly profitable and demand for its goods is very strong, but the process they use to produce their products has a massive negative impact on the environment. If that information were to be suddenly disclosed, it would likely have a negative impact on the company’s stock price and surely raised questions, uh, as to the sustainability and ethics of the company.

Second, on a company level, strong ESG traits can be viewed as indicators of companies with exemplary management teams.

Concerns about ESG factors, go hand in hand with strategic long-term thinking and demonstrates a clear vision towards the future.

Thinking about how business impacts its shareholders requires a level of holistic creative thinking that shouldn’t be underestimated and it can be a competitive advantage.

Lastly, from a global macro and humanitarian perspective, ESG is a tool that we can use to measure the direct change in the world, through how our clients invest their dollars.

As citizens of this beautiful earth we live on, it’s our responsibility towards others to ensure that we leave it in a better state than we found it. If you believe this principle is true, why wouldn’t you want your investments to reflect that?

[00:04:01] Emily: That’s a great question. What more can you tell me about the growth opportunities of ESG investing?

[00:04:07] Brian: We look at ESG opportunities by identifying sustainable thematic trends.

Some of these sustainable thematic trends are climate– with clean energy, resource efficiencies, sanitation, recycling, sustainable transportation.

And then, another trend would be in health– access to quality care, food security, clean water, medical innovation, and wellbeing.

Another sustainable theme we’re seeing is empowerment, which includes, education and employment services, financial security, information and communication technologies, and sustainable infrastructure.

To give an example of these trends countries representing 90% of the world’s GDP have net zero emissions targets by 2030. Annual investment towards these decarbonization targets will have to increase four times by 2030 to meet this goal.

These types of sustainable trends make up our ESG lens and how we identify long-term growth opportunities within ESG.

[00:05:03] Emily: Do you think ESG concerns were magnified at all as a result of COVID-19?

[00:05:09] Brian: Yeah, COVID-19 did magnify ESG issues, but it also magnified ESG trends. Companies were forced to make key decisions around employee safety, technology, and supply chain management. For some companies, this may have been the first time ESG factors were even considered within management.

Also, COVID-19 magnified ESG trends like equality, employee retention, medical innovation, e-commerce, as well as mental health and wellness.

[00:05:36] Emily: What do you think are some important questions to ask if you’re considering investing more sustainably?

[00:05:41] Brian: I would say some questions to ask yourself would be, do you prefer to buy from brands you trust? Would knowing their global footprint changed the way you shop? Is it important to invest in energy efficiency or ethical supply chains? Do you think that responsible companies make better long-term investments than companies that are always in trouble? And then finally, would you prefer an investment option than invest in companies that are contributing to a better world?

These are all great questions to ask yourself if you’re looking into ESG investing or you’re wondering how you can make an impact.

[00:06:12] Emily: Some things to think about.

Switching gears here a little bit… the SEC recently released guidance in March that opened the possibility that publicly traded companies would have to disclose links between their business and climate change. What do you think this means for these businesses?

[00:06:29] Brian: The SEC releasing guidance that publicly traded companies might have to disclose their carbon emissions and any risks associated with climate change, is great news for shareholders. This further emphasizes the point that ESG will increasingly play a larger role in how we analyze and invest in companies in the future.

[00:06:46] Emily: Thanks, Brian, let me just close out this podcast by asking if you have any final thoughts about ESG investing, in general.

[00:06:54] Brian: Yeah. The ESG investment landscape is difficult to navigate. It’s important to have a trusted resource to help you avoid costly mistakes. Um, finding quality companies and quality funds is very important, and we’ll help you do that.

At Mueller Financial Services, we’ve consulted with industry recognized ESG analysts and portfolio management teams to build our fully customizable ESG portfolios. We’d be happy to share our insights with anybody interested in ESG investing.

Also, if you’re a business owner with a 401k, and you’re thinking about how your company or its participants can take part in this ESG moment, our 401(k) specialists can assess your lineup and determine if ESG investment options would be a suitable option for your plan.

[00:07:34] Emily: Again, thank you so much for joining today’s podcast, Brian. Some great information about ESG investing, what it is and what it could mean for shareholders and investors.

And thank you for listening. If you’re interested to learn more about ESG investing or more about Mueller Financial Services in general, visit muellerfinancialsolutions.com where you’ll find more information about the firm’s services and team members. You can also follow the firm on LinkedIn at Mueller Financial Services, Inc. for more firm updates, insights, and upcoming events.

Securities offered through LPL Financial. Member FINRA/SIPC. Investment advice offered through IHT Wealth Management, a registered investment advisor. IHT Wealth Management and Mueller Financial Services, Inc. are separate entities from LPL Financial.

The opinions voiced in this podcast are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision.

Socially Responsible Investing (SRI) / Environmental Social Governance (ESG) investing has certain risks based on the fact that the criteria excludes securities of certain issuers for non-financial reasons and, therefore, investors may forgo some market opportunities and the universe of investments available will be smaller.

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