Morningstar - Q4 2021 - 18

Dispatches
themes like renewable energy, clean tech, and
clean water or those social-related themes
such as gender equity, managing population
growth, or health and well-being.
6 Assess Impact refers to integrating impact
assessments into security selection and portfolio
construction. Fixed-income managers, for
example, may consider a bond's use of proceeds,
focusing on bonds that finance projects that
benefit people and planet. Equity managers may
consider whether a company's products,
services, and behaviors support or detract from
the United Nations' Sustainable Development
Goals, which many investors and companies
are using as an impact framework. At the portfolio
level, investors may assess the overall
impact of their portfolio holdings in relation
to a goal or benchmark.
In the real world, sustainable investors often
combine these approaches, as they are
interrelated and largely complementary. It is not
uncommon for sustainability to play a leading role
in an investment strategy using several, or
even all, of these approaches to varying degrees.
Portfolios
In any given portfolio, fund, or investment strategy,
these six sustainable investment approaches
may play no role, a supporting role, or a leading
role. While the approaches play no role for
many funds, they contribute in a supporting role
to a growing number of funds, mainly by
limiting ESG risk or practicing active ownership.
Funds for which sustainability plays a
leading role often combine several, or even
all, of these approaches.
For investor portfolios that consist of multiple
underlying investment strategies or funds,
the framework can be used to target exposure to
the approaches most preferred by the
investor and evaluate how much exposure an
investor has to each approach.
Our framework neatly defines and summarizes
sustainable investing, providing investors
of all types a common reference point
for understanding its scope and variety. It can
be used to better understand investor
18
Morningstar Q4 2021
motivations, identify the most appropriate
sustainable investments for a given investor, and
evaluate sustainable funds and portfolios. K
Jon Hale, Ph.D., CFA, is a director on Morningstar's
ESG strategy team. He is a member of the editorial board
of Morningstar magazine.
1 Transferring the trust people have in you onto
other people: Make introductions, listen to women
and speak up, and advocate for women.
2 Transferring your inside knowledge: Give women
the inside scoop, share compensation
information, be a mentor or sponsor, and stand up
for someone.
For Women, Issues
Remain in Workplace
With return of events
and conferences
come office challenges.
Sonya Dreizler
DEI
Earlier this year, I wrote about how men
can be active allies of women. I wrote that an ally
is someone supportive of groups to which
they do not belong and that it's one thing to call
yourself an ally and another to do the work.
Most real, active allyship action happens quietly
and in the background.
I stated then that my wish was that men
in finance step up and commit to active allyship.
I quoted a study that found that women
represent only 18.1% of U.S. financial advisors.
I made the point that this is not a " women's "
problem and that we can't expect the
people most affected by sexism and discrimination
to be the ones to solve it (though we
sure are trying). " Men, " I wrote, " if financial
services is to grow out of the lopsided
and inequitable state we are in, the ball is
in your court. "
I went on to mention some ways men
can be active allies. I broke it down into two
main categories:
As the finance world returns to in-person work, an
opportunity to put active allyship into practice
is here. Many of us are looking forward to seeing
coworkers in person, collaborating with clients
face to face, and resuming the spontaneous
interactions and connections that come with being
at conferences and networking events.
But for many women, the winding down of the
virtual office brings back into focus the workplace
challenges that can arise from those same
in-person meetings, conferences, networking, and
just plain old being social with coworkers.
When I surveyed women for this column, I heard
a wide variety of overlooked challenges. The
common thread was that each issue added mental
weight, time, or expense-all of which create
unnecessary barriers to success.
I invite men and all leaders to think of these issues
through the prism of official company policies, less
formal company culture settings, and individual
and corporate communications.
Being the Boundaries Trailblazer
A variety of challenges come with being
a trailblazer, especially when it comes
to decision-making and having your voice treated
with respect. But there are other issues as well.
Lindsey Swanson, CFP, says one of the
challenges she has witnessed is " trying to create
healthy boundaries when women (or other
discriminated parties) before you have not openly
objected to the status quo. Older female
advisors have often chosen to endure
inappropriate jokes, pet names, etc., for the higher
goal of succeeding in the workplace (and
potentially this was the only way for them to stay
employed). So, then, if a new advisor comes
into the workplace and raises concerns about their
https://www.morningstar.com/authors/1855/jon-hale https://www.morningstar.com/authors/2396/sonya-dreizler https://www.morningstar.com/articles/1026995/how-to-be-an-active-ally-to-women-in-financial-services https://www.morningstar.com/articles/1026995/how-to-be-an-active-ally-to-women-in-financial-services
Morningstar - Q4 2021

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