ESG investment consulting is one of the fastest-growing fields as investors look for insights on investing billions of dollars for a cause and generating significant returns in the process. Likewise, ESG Investment consultants play an important role in advising on capital allocation to help solve underlying environmental, social, and governance issues.
ESG Investment Consultant Roles
Gone are the days when impact investors would misprice risk, let alone make poor ESG investment decisions. ESG consultants leverage some strategies that allow them to offer in-depth advice on various responsible investing opportunities.
The likes of The Altruist League’s services allow asset owners to make investment decisions aligned with the responsible investment objectives strategies and policies.
Likewise, ESG consulting advisors develop customized impact investing strategies on behalf of clients. Their role revolves around identifying appropriate responsible investment opportunities in various industries, geographies, and opportunities for partnerships.
“We offer ESG consulting services that seek to support investors in more closely aligning their capital with their unique social, environmental, and financial objectives. Our ESG Investment consulting services is informed by years of work with a variety of impact investors,” said The Altruist League’s Managing Partner,Ekaterina Chernova.
ESG Investment Consultants Strategies
Diversification
One of the strategies used by ESG investment consultants calls for greater diversification when it comes to sustainable investing. In this case, investors are called upon and advised to spread capital into various ESG projects and investments instead of putting all the eggs in one basket.
Diversification goes a long way in averting large-scale losses as some investments can offset losses generated by other investments.
According to The Altruist League’s President Milos Maricic, “Diversification across multiple risk-controlled strategies goes a long way in managing wealth while protecting an investment portfolio from unforeseen events or wild swings.”
With the diversification strategy, tactical asset allocation comes into play, whereby capital is allocated to a combination of ESG investment opportunities.
Growth Investing
Growth investing is an investment strategy whereby ESG consulting advisors guide impact investors in analyzing various fundamental factors such as financial statements. The idea of this strategy is to discover ESG investments with solid growth metrics and long-term prospects when it comes to value generation.
In these cases, ESG Investment consultants assist investors to discover industries with tremendous long-term potential. Focus is usually on industries still in the early phases of growth known to offer strong upside potential.
This investing style also encourages investors to construct a well-diversified sustainable investing portfolio that is not only focused on returns but has a significant impact on ESG issues. Growth ESG investments perform best in mature stages but crucial to get in early in the game.
Value Investing
Value investing is an investment strategy pushed by ESG investing consultants that seeks to encourage impact investors to focus on ESG investments being offered at a discount. Finding a bargain is the goal with this strategy as a way of securing long-term optimum long-term returns.
With years of experience and well-curated data, ESG Investment consultants can direct investors focused on responsible investing into value investment opportunities with tremendous long-term prospects.
The investment strategy entails buying into ESG opportunities, trading at a discount, and holding for long periods, given the prospects of generating massive long-term returns.
Risk Management
Risk management is crucial in any investment play. In this case, the main goal is to avoid large-scale losses regardless of the investment strategy deployed.
Likewise, most ESG investment consultants have developed investment strategies geared towards clients’ unique goals while ensuring that risk exposure is kept bare minimum. The strategy advocates for low correlation to broader market volatility.
With Asset allocation, impact investors can divide their investment portfolios into diverse asset classes, conversely minimizing investment risks.
Working with Clients
ESG investment consultants work with ESG focused investors on formulating investment strategies that rhyme with their investment goals. In this case, they review the client’s financial position and develop a plan to meet their goals.
Some of the strategies leveraged include monitoring investment portfolios and carrying out the necessary adjustments whenever needed. Likewise, they advise on specific ESG risks upon carrying out in-depth analysis.
