If you still wonder whether it's worth talking to clients about values-based investing, consider what Merrill Lynch is doing.

Merrill Lynch Wealth Management, owned by Bank of America, is providing an Environmental-Social-Governance (ESG) Investing program that its 13,700 brokers and investment advisors can offer to all their clients. Advisors at BofA's other businesses, U.S. Trust and Merrill Edge, also have access. That includes nearly 300 advisors at U.S. Trust catering mostly to high-net-worth clients and 2,100 Merrill Edge Financial Solution advisors who provide advice via phone or at some BofA banking centers in the U.S.

Merrill Lynch is not the only big wirehouse to roll out a values-based investing program over the last couple of years. In 2012, Morgan Stanley launched a platform for its financial advisors to offer clients investments with positive social and environmental impact. The move by Merrill Lynch reinforces the notion that ESG investing is going mainstream.

According to a 2012 report by the US SIF Foundation‚ as of year-end 2011, more than one out of every $9 under professional management in the United States‚ $3.74 trillion or more‚ was invested according to sustainable, responsible investing (SRI) strategies. The organization's next trends report on SRI assets will be published in the fourth quarter, and that should provide interesting insight on whether the percentage of dollars flowing to SRI is continuing to grow.
 
Surya Kolluri, who manages policy and market planning for Merrill Lynch's Global Wealth and Retirement Solutions Business, is overseeing the development of the firm's ESG program, which was introduced last year.  

How big the ESG program has grown is difficult to tell, however; a company spokeswoman said she could not provide an AUM total. So far, Kolluri says, the highest level of interest has come from high-net-worth and institutional clients.

Kolluri says Merrill Lynch was motivated to offer an ESG program for three reasons: Clients want values-based investments, the market for ESG investing has grown dramatically in the last 12 to 15 years, and the firm has the capabilities to offer a strong program.

Company research showed that clients were very interested in well-performing investments that would help, or at least not hurt, the environment. A study by U.S. Trust also revealed an interesting statistic: 45 percent of those asked said they would like to have a conversation with their advisor on being able to invest in line with their values. Kolluri adds a Pew study of millennials found that an even greater percentage of that group are interested in ESG investing.

Not only did Merrill take notice of the fact that the ESG business is becoming mainstream, but it realized it had in-house a well-regarded industry recognized ESG research analyst—Sarbgit Nahal, who has written client-friendly reports on water, energy and obesity.

Merrill's next step, says Kolluri, is for the firm to make the ESG Program more robust. He noted on Dec. 31 the company announced a social impact partnership deal with the state of New York on reducing prison recidivism. "A differentiating characteristic was that individual investors were involved in financing that project," he said. “What we’ve done is open the door to future deals for individual investors.”

Kolluri also pointed out that Merrill's ESG platform is open architecture and includes a wide variety of mutual funds, ETFs and separately managed accounts that its advisors can use to build portfolios for clients. One of its newest offerings is the ALPS Workplace Equality ETF (EQLT), which tracks an index of 140 publicly traded global stocks chosen because the issuing firms support equality for lesbian, gay, bisexual and transgender employees. Another new offering is the recently introduced Calvert-Osmosis MORE World Strategy, an SMA that selects best-of-breed stocks based on how efficiently the firms use resources versus their revenues.

Last but not least, Merrill also offers proxy-voting services to clients. One service is centered on general ESG principles and the other on Catholic investing.

Part of making the program more robust is for Merrill to build awareness, training and engagement with its advisors, Kolluri said. The effort includes in-office training sessions, get-togethers for top advisors, Web casts and internal intranet offerings that provide the firm's latest ESG thinking and investments.

And what Merrill offers now through its ESG program won't be all. "We will continue to innovate," Kolluri promises.