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Tom Meaglia, ChFC®, AEP®,
CLU®, CRPC®, MSFS
Chartered Financial Consultant
Investment Advisor Representative
Chartered Retirement Planning Counselor
CA Insurance Lic. #0567507
Meaglia Financial Consulting
2105 Foothill Blvd., #B140, La Verne, CA 91750
Toll Free: 800-386-3700
Bus: 909-593-6105
Cell: 818-681-8600
Fax: 909-593-6120
Email: tom@meagliafinancialconsulting.com
Website: www.meagliafinancialconsulting.com
Environmental and social issues are heavily reported topics in American news these days. This heightened awareness among citizens has led to cultural changes in areas from environmental issues to human rights. Financial services firms have created a new form of sustainable investments in response to this cultural shift.
According to the 2022 Investment Company Institute Fact Book, 740 mutual funds and exchange traded funds (ETFs) with assets of $529 billion were invested in ESG securities at the end of 2021, up from 583 funds and $381 billion in assets the year before.
What type of stocks meet ESG criteria? One might be a company that uses technology to capture carbon from the atmosphere while another might simply be a waste management firm. Or an ESG company might populate a board of directors with diverse members while taking extra steps to avoid investments based in countries with human rights abuses.
There are dozens of other causes that could qualify as ESG initiatives. The problem is that average investors could have difficulty sorting through differing definitions of what is socially responsible.
You could do the homework yourself by examining an ESG fund’s holdings or exploring an individual security’s activities to find holdings that meet your definition. Even then, you might find a company complying in one area, such as an electric vehicle maker reducing carbon emissions, but tripping up elsewhere because the materials in lithium-ion batteries that power these vehicles can be toxic when extracted.
Some companies may also “greenwash,” using deceptive practices to qualify as an ESG holding. Or they may simply overstate or exaggerate their ESG practices, making them difficult for investors to understand.
*Investing in ESG funds may create risks or forego exposures available to other types of products which could negatively impact performance. Redeemed shares may be worth more or less than their original value. Past performance won't guarantee future results.
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Thomas Meaglia is an Investment Adviser Representative of Coppell Advisory Solutions LLC, dba, Fusion Capital Management, a registered investment adviser that only conducts business in jurisdictions where it is properly registered, or is excluded or exempted from registration requirements. Registration as an investment adviser is not an endorsement of the firm by securities regulators and does not mean the adviser has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting.
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Meaglia Financial Consulting and LTM Marketing Specialists LLC are unrelated companies. This publication was prepared for the publication’s provider by LTM Client Marketing, an unrelated third party. Articles are not written or produced by the named representative.
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