Environmental, Social and Governance Investing

ESG investing starts at home

ESG Investing or considering the Environmental, Social and Governance impacts of your investments (sometimes also referred to as Socially responsible investing or Sustainable investing) is an important topic for many clients and a growing trend on Wall Street.

At the core, this type of investing implies that the financials of a particular company are not the only factor to be considered when determining if its stock or bond makes it into a portfolio. In addition, we should also consider the Environmental concerns, Social implications, and the type of Governance used by a company. This type of investing considers topics as wide as carbon emissions, water, and air pollution, deforestation, employee gender and diversity, fair labor practices, lobbying, diversity of board members, executive pay, and the list goes on.

Barton ESG Investment
Barton ESG Investment

Through his personal analysis, Zachary Barton, has seen limited instances of ESG portfolios lagging behind their traditional counterparts over short periods of time. However, over longer periods of time, the results are better. Morgan Stanley discovered that between 2004-2018, ESG investments had similar returns as traditional investments over the long run while also displaying less downside deviation during turbulent markets. Morningstar’s review of 26 sustainable index funds supported this conclusion when their research showed that ESG funds outperformed comparable traditional funds during the turbulent first quarter of 2020.

The takeaway is this: there is not yet a perfect answer to the challenges of including such diverse factors in investment decisions. Therefore, here at Barton Financial Group, we have model portfolios that utilize ESG principles and will continue to seek to expand the number of our ESG options.

Barton ESG Investment

Owner and lead Financial Planner, Zachary Barton, doesn’t think having ESG portfolios is enough. His opinion is that ESG should start at home and that this company should not only ‘talk the talk’ but also ‘walk the walk.’ He said, “I don’t believe I can in good faith tell clients we support ESG investing if Barton Financial Group itself wouldn’t pass an ESG screen. That means changes throughout our process even down to how I personally get to work. I was born and raised in a small town in Texas, so no surprise I love my big truck, but driving it daily is just not sustainable. Therefore, if you come by our office in person, as often as not, you will see my electric bicycle parked out front instead of my big gas-guzzling Ford F-150.”

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107 S. Main St.
Ste. A Kyle,
TX 78640
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