Spurred by extreme weather and new science bolstering fears of catastrophic events, more investors are taking climate change and other societal issues to heart when they decide to where to put their money.
Patricia Farrar-Rivas, founding principal, CEO and COO of Veris Wealth Partners, says investors are seeking different kinds of investment options, ones that can have a lasting impact beyond the bottom line.
That’s a change from not so long ago when only high net worth individuals in California or New York were concerned about such high impact investing.
Everyone else, said Lori Hardwick, EVP of advisory services for Envestnet, “was sort of on the outside looking in,” and while some financial advisors may have wanted to gauge their clients’ desire for more socially conscious, sustainable ventures, the question was an awkward one to ask, mainly because advisors did not have the requisite information and tools at their disposal.
Today, though, that awkwardness is gone. Clients are not afraid to ask for sustainable investments and advisors across America are looking to not only educate themselves about impact investing but also figure out where the best options lie.
In response, Envestnet last month expanded the capabilities of its Envestnet Impact Investing Solutions program (first launched in 2008 in partnership with Veris), to offer impact investment services through its Portfolio Management Consultants group (Envestnet PMC).
During the past year, the program’s assets under management jumped 82% to $750 million, reflecting the increased desire of both advisors and clients to channel money into investment vehicles with a sustainable, meaningful goal.
Of course, the majority of the money going into impact investing still comes from the uber-wealthy, who, Hardwick said, more actively seek these opportunities and have greater access to them.
But the idea behind programs like Envestnet’s is to level the playing field so regular investors can also partake in impact investing, not just because it is becoming more popular, but also because it’s becoming increasingly profitable, Hardwick said.