Looking to invest sustainably?
Investors who are seeking to be more conscious about the names in their portfolios can invest in ETF's that follow the values that they believe in. Here's why investors should consider adding these ETF's to their portfolio.
ESG, or environmental, social and governance, investing is for investors looking to invest in companies that share their ideals--whether they care about the social impact, the environmental impact, or the governance impact of the company.
Ethan Powell, CEO of Impact Shares, helped to launch an ETF last year called the Impact Shares NAACP Minority Empowerment ETF (NACP) .
He explained the name to TheStreet.
"It is kind of a mouthful, but it's important to include all of those organizations because it's an ESG fund. But the premise is that with generic ESG strategies where we have a corporate citizenship score of A plus versus a B minus and it factors in 500 different metrics and very well-intended asset managers are sort of figuring out who a good corporate citizen is. You lose a lot in the communication within the investor base and people are really trying to reconcile their system of beliefs back to some of these ESG strategies. And by including the NAACP, really what we're asking is what does a good corporate citizen look like through the lens of the NAACP, specifically, as it relates to minority empowerment here in the U.S. So it's very targeted, it's a single social issue, equity market proxy. So you still get your broad equity market exposure, but you know exactly what your capital is going towards improving society in which direction we're steering society," explained Powell.
But he also dug into why investors should consider ESG ETF's.
Watch the full video for more.