How ESG investing has the potential to be a transformational road map

It’s understandable that you might be taken aback by the daily onslaught of challenging news. From the real, destructive impact of climate change — drought, wildfires, hurricanes, flooding — to global and domestic political turmoil to the deadly Covid-19 pandemic, there appears, at times, to be no end in sight. But human beings are a complex species. Whatever our collective faults, we have a genius to batten down the hatches and set sail ahead. All you need to do is shift your perspective slightly to see the efforts being made and the paths ahead.

In just the few minutes we spent brainstorming this topic, we discovered so many people and companies with inspirational, positive stories that we lost count. Those we mention are no more “special” than ones you might have heard or know about. What they have in common is that they are doing something special to transform local and global economies, tackle issues that impact everyone and are doing things that will change the trajectory of our collective destiny.

The increasingly growth- and investorfocused popularity of ESG (environmental, social, governance) platforms is a good example of a fundamental change occurring right in front of us. More people are letting their investment dollars speak quite loudly and, more than ever before, the infrastructure for ESG platforms is rapidly growing to serve them.

As a sign of the times, earlier this year J.P. Morgan, one of the world’s largest banks, acquired OpenInvest, a company that helps investors measure the social impact of their investments. “At OpenInvest, we believe that aligning capital with social and environmental values is a critical driver of widespread change,” said Conor Murray, OpenInvest co-founder and CEO, about the merger. (Full disclosure: Casey Snyder was previously an advisor to OpenInvest prior to the JPM announcement.)

Look at the General Motors statement that the company will become an all-electric vehicle company by 2035 and pledges to be completely carbon neutral by the same year. A tipping point is coming not only for electric vehicles but also for solar energy.

Here are a few more examples why ESG investing (either through your investments or local buying decisions) proves the future is now:

• The green financial services company Aspiration has pledged never to invest in fossil fuel corporations and will plant a tree each time a debit or credit card is used. Via its Plant Your Change initiative, Aspiration pledges to plant 100 million trees in the coming years to offset carbon emissions. According to the company, it planted one million trees in the first three months of the program in 2020.

• In New Hampshire, Charley Cummings, founder of Walden Local Meat, which connects hundreds of small farms with tens of thousands of customers in the Northeast, will open Walden Mutual, a bank to help those farmers with financing. Imagine connecting sustainable farming with sustainable banking.

• For companies yearning to do the right thing but unsure how to do it in a comprehensive way, the global company SouthPole.com is bringing together public and private sectors and non-governmental organizations to create real and long-term solutions to the climate emergency. (Tom’s daughter Annie Sedoric is employed by SouthPole.)

• Closer to home, there is New York and Portsmouth-based Walden Renewables, which puts together medium and large solar and wind turbine renewable energy projects throughout the country, including projects in New Hampshire and Massachusetts.

• In Kittery, Maine, there’s a shop called We Fill Good that offers consumers the opportunity to reduce waste through non-toxic home and body cleaning products with an emphasis on sustainability in production and use.

These companies and organizations are at the tip of the iceberg merging innovation and entrepreneurial dedication to drive change locally and globally. For those who might be skeptical, simply consider what happened in 2007 when Apple introduced the iPhone 2G. This was the first step in a smartphone/computing revolution that now connects more than 5 billion people globally, not to mention having far more computer processing power than the mainframes that sent the Apollo astronauts to the moon five decades ago.

Change may seem glacial until it isn’t. It happens in cascades of opportunities across the world. This trajectory in ESG investing and conscious efforts in sustainability could potentially be the transformational road map that makes the Industrial Revolution of the 19th century seem quaint by comparison.

Tom Sedoric is partner, executive managing director and wealth manager, and D. Casey Snyder is partner, senior vice president and wealth manager of The Sedoric Group of Steward Partners in Portsmouth.