On Monday, I am flying to Portland, Oregon to visit my colleague Joey Fishman. If you don’t know Joey, he is our in-house expert for ESG (environmental, social, and governance) investing. Josh wrote about our sustainable investing strategies and why we offer them to clients a few years ago. Ironically, I’m making this trip in late July to escape the brutal New Orleans’ heat and humidity. You could say I’ve become an environmental refugee.
ESG investing may be new, but I believe it will be a part of everyone’s portfolio in ten years. ESG is about more than the environment. Sustainability considers the needs of all stakeholders of public companies – customers, employees, shareholders, and the surrounding community. It means taking care of another valuable resource, our human capital. Institutional investors have used good governance screens in their investment models for years. Issues such as non-voting share classes and the independence of board members can have an enormous impact on shareholder returns.
At my prior firm, I helped launch a separate account strategy that invests in companies with more women in leadership. I wrote a whitepaper illustrating that companies with gender diverse boards have better stock performance. For that paper, I looked back 10 years to study the gender diversity of boards in the S&P 500 Index. Back then, almost 10% of companies had zero women on their board. I was happy to read that the last company in the index with an all-male board finally added a woman this week. Welcome to the 21st century.
This will be my first trip to Portland and to the state of Oregon, and I can’t wait. We plan to check out all the Portland dining scene has to offer and steal a few afternoon hikes. If you live in Portland and want to get together next week, please reach out. I have reserved time in my schedule to meet with anyone interested in learning more about how we work with clients.