Harmonizing Values and Returns

Your values and investment value can go hand in hand.

Interested in putting your investments where you values are? ESG investing helps you to achieve your goals in a way that is consistent with your beliefs. Business issues not traditionally included in the analysis of an investment portfolio are becoming more important value-producing elements for successful investing.

Traditional concerns that ESG investments would hinder portfolio performance are waning. Each day, more investors are coming to believe that socially conscious investing can help deliver superior, risk-adjusted returns over the long term.
 

Investors concerned with ESG issues haven’t had to sacrifice investment returns.

Before “sustainable investing” became mainstream, many assumed returns would suffer. But today, investors realize that there’s no need for trade-offs: companies that best handle the ESG drivers of business performance have clearly kept pace.

Growth of $100 — Gross of fees ($)

Source: Bloomberg, as of December 31, 2014. Past performance is no guarantee of future results. All investments involve risk, including possible loss of principal. Socially aware stocks are represented by the MSCI KLD 400 Social Index, and the broad stock market is represented by the S&P 500 Index.

The MSCI KLD 400 Social Index comprises companies with high Environmental, Social and Governance (ESG) ratings and excludes companies involved in Alcohol, Gambling, Tobacco, Military Weapons, Civilian Firearms, Nuclear Power, Adult Entertainment, and Genetically Modified Organisms (GMO). The Index aims to serve as a benchmark for investors whose objectives include owning companies with very high ESG ratings and avoiding companies that are incompatible with specific values-based criteria. The S&P 500 Index is a capitalization-weighted, composite index of 500 stocks designed to measure the performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. An investor cannot invest directly in an index. Unmanaged index returns do not reflect any fees, expenses or sales charges.
 

ClearBridge Investments , a Legg Mason investment affiliate, believes that investors shouldn’t have to choose between performance and sustainability. That’s why ClearBridge’s ESG Investment program favors companies that promote best practices when it comes to the environment, social issues and corporate governance. ClearBridge feels that the ways in which companies integrate these issues into their operations can potentially impact competitive opportunities and growth potential — and ultimately drive stock prices.
 

ESG influence that’s set apart.

ClearBridge’s ESG Investment program takes a different investment approach from most of its peers. For instance, ClearBridge doesn’t look solely at ESG factors to determine which companies go into the portfolio. Instead, ESG factors help shape conviction, influencing whether a particular company should be held, for how long, and at what position size.

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