Put Your Money Where Your Heart Is

Tuesday, September 1, 2015

By Carol Thompson
Traverse City Record-Eagle
Originally published August 25, 2015 
View the original article

Acting on closely held values can extend beyond volunteering or saying "please" and "thank you."

You can put your money where your heart is with values-based investing.

"If you think that cigarettes aren't good for society, then you don't profit from owning cigarettes," said Paul Sutherland, Chief Investment Officer at FIM Group in Traverse City. "(If you think) video games that are violent and objectify women are unhealthy for society, you don't invest in them."
 
That's the mission for FIM Group investors — invest in companies you support. They choose companies with practices that benefit society.
 
Values-based investing makes financial sense, Sutherland said. Companies that act with integrity accrue loyal customers and spend less time in court defending themselves.
 
"If a company's being unethical in their products, why would you expect them to be ethical in other areas of their corporate activities?" Sutherland said. "If somebody is dishonest to somebody else, they're going to be dishonest to me."
 
FIM Group investors select companies for their customers' portfolios. Financial advisers Mecky Kessler-Howell and Kristi Avery, of Traverse City's Progressive Asset Management Group, tailor their customers' investments to their customers' beliefs.
 
Kessler-Howell and Avery's customers fill out questionnaires to determine their values when it comes to topics such as animal testing, the military, nuclear power, human rights, environmental performance and more. Customers' portfolios reflect their values by avoiding companies that don't fit and investing in companies that do.
 
Keeping diverse portfolios is still a goal. Kessler-Howell and Avery wouldn't invest all of an eco-conscious customer's money in renewable energy.
 
"You try to find another company in the same sector that is doing better," Kessler-Howell said. "You don't just screen things out."

 

Clients can also buy stock in companies as a means of influencing their behavior. Company shareholders could vote to add diversity to boardrooms, or reduce waste created by product packaging.

"We're pushing some major fortune 500 companies to make changes to their business practices," Avery said.

Avery and Kessler-Howell work with a lot of charitable and religious organizations, and some individual clients.

Values-based investing is also called Socially Responsible Investing or ESG investing, which stands for plans that consider companies' Environmental, Social and Governance practices.

The concept became popular for mainstream investors as a global push to end apartheid in South Africa, Avery said. Values have shifted somewhat. Clients now often seek to divest from fossil fuels.

The local investors say interest in values-based investing has grown, which worries Sutherland. He's wary of investment firms that offer both portfolios that maximize profits and portfolios that consider ethical business practices.

Kessler-Howell said individual investors are increasingly turning toward responsible investing as a means of influencing the world.

"You vote with your dollars every time you spend, but you can vote with your dollars every time you invest, too," Avery said.

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