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n e w h a v e n b i z . c o m | D e c e m b e r 2 0 2 2 | n e w h a v e n B I Z 17 F o c u s - W e a l t h M a n a g e m e n t Founder John Beirne (left) and President John-Oliver Beirne in the Shelton offices of Beirne Wealth Consulting Services LLC. PHOTO | CONTRIBUTED Cash For A Cause Values-based investment trend on the upswing By Michelle Tuccitto Sullo F or many investors, saving for the future isn't enough, they want their investments to only go to- ward environmental and socially conscious entities or businesses that align with their core beliefs and values. Multiple area banks and wealth management firms have responded to this trend in an effort to make it easier for people to manage their wealth in a values-based, socially responsible way. Berkshire Hills Bancorp Inc., the Bos- ton-based parent company of Berkshire Bank, for example, for the past year has offered customers a suite of investments, or socially responsible investment port- folios, aimed at helping customers "align their investments with positive environ- mental and social outcomes." According to the bank, which has over 20 branches in Connecticut, the portfolios include companies with solid track records in these areas. Berkshire built the portfolio based on factors such as carbon emissions, air and water pollution, waste management, diversity standards, human rights, workplace safety, transparency and accounting standards. Kathryn Hersey, Berkshire's senior vice president, director of wealth man- agement and chief investment officer, said there has been "significant growth" in socially responsible investing in recent years. e US SIF Foundation's 2020 biennial "Report on U.S. Sustainable and Impact Investing Trends," revealed that sustainable investing assets now account for $17.1 trillion, or one in three dollars, of the total U.S. assets under professional management. is represents a 42 percent increase over 2018. A new report is due to be released in mid-December. e foundation indicated in Novem- ber that flows into sustainable funds have continued to be positive this year. It defines sustainable investing as considering environmental, social and corporate governance (ESG) criteria. According to Hersey, since Berkshire launched the portfolio, it has been well-received. "It is going very well," Hersey said. "We've seen a number of nonprofits seek to align their mission with their investments, and individual clients are also interested in environmental, social and governance factors. We've seen nice growth and development." ESG ratings David Sacco, practitioner in resi- dence in the finance department at the University of New Haven's Pompea College of Business, said this type of investing is growing. "It's more than a trend — it's be- coming a pretty significant metric that people are looking at in the professional money management world," Sacco said. "Investors care about it. Money man- agers are using it as a marketing tool to get people to invest more money with them." e college is having students learn about ESG investing and rating sys- tems, knowing that it will be crucial for their careers in finance, he noted. "We know that our students who graduate the business school are going to be dealing with this in a big way over the next few years," Sacco said. "We think this is going to be a hugely important aspect of any business edu- cation." e goal of values-based or social- ly conscious investing, according to Sacco, is to make investment decisions incorporating factors such as ESG ratings that people care about, while also ensuring that investors get the best returns. "Everybody wants to do things that are socially responsible," Sacco said. "e debate right now is — how do you do that and still maximize investment returns? I suspect that we'll have that debate for the next five, 10, 15, 20 years, and we'll sort of refine the process over time and then, we'll see how effective it is." Meanwhile, com- panies are spending time and money to make sure they are adhering to ESG principles, notes Sacco. "It is a little bit easier to measure environmental impact," Sacco said. "When we talk about social issues, those become harder to quantify. Yet, people want companies to be managing them- selves this way, and they want invest- ment funds, at least those that they want to invest in, to be investing this way." A key question is how to accurately measure or score a company on all these factors, according to Sacco. While it might be easier to measure a company's carbon footprint, factors such as its diversity efforts and community impact are more ambiguous and diffi- cult to measure, he noted. Broad appeal John-Oliver Beirne, partner and presi- dent at the Shelton-based Beirne Wealth Consulting Services, said investing based on one's values has broad appeal for everyone, regardless of gender. "When you start to talk about values, everyone starts to think, 'Hey I have these things that I believe in,' and I think it creates some more engagement," Beirne said. "I think people become more interested and more excited." Exactly what is important to clients varies, he said. For some, it may be the environment, Source: US SIF Foundation Sustainable investing in the United States, 1995-'20 David Sacco "My primary tip would be to look underneath the hood and understand what companies are part of the fund or portfolio that you're investing in," Kathryn Hersey, Senior Vice President, Director of Wealth Management and Chief Investment Officer, Berkshire Bank Continued on page 18

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