In Sireklove’s experience, a consensus is building that “certain environmental and social issues absolutely fit within the framework of good governance, and those with large voting power and growing assets have a responsibility to take that seriously. But it’s all an ecosystem, and there are a lot of different participants who play different and critical roles in the process of owning and influencing.”
Understanding Generation ESG
Sireklove is clear that the so-called generational divide on ESG investing is not so much a divide as a difference in strategy. Parametric’s 2019 Responsible Investing Outlook: Generation ESG, written by Sireklove and available on the firm’s website, makes a case for generational similarities as well as differences when it comes to multi-generational family asset management. I was surprised to learn that millennials and their parents and grandparents agree, at 80 percent, with the statement that “companies should take responsibility for their impact on the environment and social well-being.” They differ on how to achieve it, with millennials taking it for granted that the ESG impacts of their choices should be considered when building an investment portfolio.
Finding common ground then, stresses Sireklove, is supporting older generations to see how portfolio construction and active ownership can achieve RI goals without jeopardizing performance. Active ownership, which facilitates the pooling of assets with other like-minded asset owners to influence change, is something that older investors often don’t realize is an option. “That this is available really gets them interested,” says Sireklove. “We’re seeing opportunities to forge common ground, and part of that comes out of the fact that there’s often long-standing generational support for the ideas at stake. It’s a matter of figuring out how to practically implement them, and that is a solvable problem.”
For Sireklove, her work as director of RI at Parametric has given her the opportunity to put the two parts of her life together: “After 20 years of writing and speaking about the financial markets, investing and public equities in particular, I can now ask the important questions that have interested me for years: How do climate change and capital interact? What is the role of companies intersecting with opportunities for everyone regardless of gender, race or economic background? My goal is to meet all of these client needs in a way that satisfies the investment professional in me.”
Paul Ellis founded Paul Ellis Consulting to work with financial advisors who want to integrate sustainable and impact investment strategies for their clients.