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Sustainable and Impact Investing

Pursue positive change. Seek competitive returns.

More companies are changing the way they do business. They're examining not only their profit potential but also how their practices impact the environment and society at large.

Sustainable and impact investing offers you the opportunity to invest in companies that are working towards better ways of doing business with innovative approaches to support their long term performance. 

Help to solve society’s biggest and growing challenges. Live out your beliefs. Invest to reflect issues that matter to you while pursuing your investment goals.

It’s easy to start
A flexible approach and multiple investment options make it easy for you to start investing for sustainability and impact. We can help you adjust your existing portfolio, add a single solution, or choose a new model portfolio.

Choose the impact approaches you prefer through our A-B-C framework.

Your Merrill advisor helps to ensure your sustainable and impact investing strategy reflects your risk tolerances, time horizons, and preferences through actionable planning and objective advice.

What you care about matters
Every investor has unique motivations for choosing to invest for sustainability and impact. In addition to seeking financial performance, you may want to:

  • Invest in companies with responsible environmental and social practices
  • Align your portfolio with your values or goals
  • Support specific issues or causes you care about
  • Target innovations that help solve social or environmental challenges

 

Your Merrill advisor can help customize your sustainable investing strategy based on your preferences and motivations. We can also review your current portfolio to help you become aware of what you currently own and find potential opportunities to align your investments with your sustainability-driven goals.

Regardless of how much you direct toward sustainable strategies, your investments can make a difference because you're part of a larger group of sustainable investors helping to drive meaningful change. Your portfolio can contribute towards responsible business practices and lead companies to be more environmentally and socially responsible.

The case for sustainable investing

  • Inflows into sustainable strategies over the next few decades could be roughly equivalent to the size of the S&P 500 today.1
  • Firms with good or improving environmental, social, or governance (ESG) characteristics have been shown to perform as well as—and may even outperform—their peers.2
  • Companies that are ranked higher by ESG data providers have generally seen lower future earnings volatility.3
  • Nearly two dozen emerging markets offer approximately $23 trillion in climate-related investment opportunities.4
  • Companies with good or improving social characteristics have, on average, outperformed companies with negative characteristics.5
  • While performance results have varied over time, companies with better scores on board diversity and management diversity saw consistently higher future return on equities than counterparts with lower scores.6

 

Make better informed investment decisions
Some investors worry that creating positive impact with their portfolio means giving up returns. However, sustainable and impact investing can often offer competitive performance7 and appropriate levels of risk8 compared to traditional investments.

Companies that incorporate environmental, social and governance (ESG) factors into their decision-making have the potential to deliver competitive returns over the long term—because they’re focused on creating lasting value. Their practices can even help mitigate the impact of risks beyond their control, like droughts, high energy costs, or labor unrest.9

Sustainable and impact investments at Merrill undergo assessments by our Chief Investment Office for the quality and competitiveness of the investment strategy as well as analysis of the intentionality and depth of environmental, social and governance (ESG) integration.

Measuring your impact
Measuring progress is an important part of sustainable and impact investing.

We add an extra layer of analysis to track investments against environmental, social, and governance benchmarks. We can assess impact based on the following themes:


Please note that the examples under each theme are illustrative of the types of investments possible, and are not necessarily strategies available today. Investment strategies with a local or targeted market focus may be limited.

What are we doing as a company?
As one of the world’s largest financial institutions, we take a key role in building a more resilient future. Through our strategy of responsible growth, we are deploying capital towards a more sustainable economy—helping to create jobs, develop communities, foster economic mobility, and address society’s biggest challenges around the world.

Learn more about what we’re doing to foster sustainability and have a positive impact.

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1 BofA Global Research, ESG from A to Z: a global primer. November 8, 2019.

2 Hermes Investment Management, ESG investing: A Social Uprising, 2018.

3 BofA Global Research, ESG Matters – US: Top 10 reasons you should care about ESG, September 2019.

4 Governance & Accountability Institute, Inc., 2019.

5 Hermes Investment Management, ESG Investing: A Social Uprising, 2018.

6 BofA Global Research, “Thematic Investing: The She-conomy,” March 6, 2019.

7 Hermes Investment Management, ESG Investing: A Social Uprising, 2018.

8 “Climate change: The investment perspective.” EY, 2016.

9 “Deconstructing Risks in Impact Portfolios," Bank of America GWIM CIO, March 2018.

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