Doing Well By Doing Good

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Staff report

From eating healthfully to thinking sustainably, our daily choices are a reflection of the dynamic forces shaping global markets and national economies.

According to Rachel Barzilay, CAP®, CFP®, CRPC®, Managing Director, Wealth Management Advisor and Senior Portfolio Manager with Merrill Lynch Wealth Management in Boca Raton, impact investing is increasing in popularity among those seeking to make a positive difference through their investments. Impact investing refers to investments involving companies, organizations, and funds with the intent to generate a measurable, beneficial social or environmental outcome in addition to a financial return.

As we celebrate Earth Day on April 22, we sat down with Rachel to discuss the steps investors should take to not only ensure a positive financial return through impact investing, but also to make a positive impact on their communities and environment.

What is the first step investors should take when it comes to impact investing?

Impact investing covers many different investment landscapes; therefore, it is important to pick a cause or issue that is meaningful to you. You can use personal preferences to find socially responsible causes that align with your beliefs. Additionally, you can choose entities that excel at a range of environmental, social and governance factors or social themes. Be mindful that regardless of how or what you choose, impact investments should follow market-based strategies.

In honor of Earth Day, we choose the environment – now what?

Now that you know what you will invest in, it is time to choose an investment option. A variety of products can be drawn from Merrill Lynch’s roster of high conviction investment solutions that have been selected by our Chief Investment Officer. These include investment options designed to deliver diversified, multi-asset exposure to fit your portfolio objectives while also allowing you to invest for positive social and environmental impact. You can visit ml.com for more information and to find an advisor near you.

In what ways can investors get even more involved?

Aside from impact investing, people can offer other thoughtful contributions to effect change and get others involved.

Many companies partner with nonprofits and charities, providing employees with monthly, quarterly or annual opportunities to volunteer their time and talents to helping others and improving their communities. For instance, some companies and their employees may help plant trees or gardens to help improve green space in their communities for Earth Day.

There has also been recent news coverage around a practice known as shareholder activism, where one investor teams up with fellow shareholders to effect changes at companies in which they hold substantial amounts of stock.

Is impact investing sustainable, or could it simply be a passing fad? While it may have emerged only recently as an option across the business landscape, impact investing is unlikely to fade away anytime soon—in part because of the passion of many coming-of-age investors, particularly millennials, to challenge the status quo and effect change.

While more traditional investment opportunities remain the most popular, many of today’s investors are excited about an added option to make an impact while earning returns. For investors that are equally interested in “doing well by doing good,” there are a variety of avenues to do so – including through their investment activities. To learn more about this growing trend, be sure to consult with a financial advisor.