Lena has decades of experience working in the tech sector and is growing increasingly curious about how to actively invest in businesses, like her current tech startup, that are committed to creating environmentally responsible products and services.
What We Learned
Lena’s existing financial situation is secure because she has done a tremendous job saving. She maxes contributions to her current 401(k) plan, has consolidated accounts from prior employers, and has established a well-funded emergency savings. She is about to inherit a large portion of her mother’s estate and wants to make more meaningful investments with her inheritance than the initial investment ideas her investment broker had recently shared with her.
We would review Lena’s current financial plan to ensure the pieces are in place to secure her financial future, then guide her through a process so we can better understand her appetite for risk, her personal passions for making meaningful impact, as well as how much of her overall portfolio makes sense to dedicate to impact investing.
We would then design a core portfolio that matches her long-term risk tolerance while restricting exposure to industries she may be averse to such as alcohol, tobacco, gambling, and defense. Companies conducting animal testing, fracking or other environmental damaging processes would also be excluded. This first phase of impact investing is based on restriction. The goal is to essentially do good while doing no harm.
Gender equality, alternative energy, and good labor relations are areas that Lena felt most strongly about supporting. Following our core-satellite investment approach, we proposed satellite investment opportunities that incorporate these specific social and environmental concerns into their long-term growth goals.
Incorporating impact investing into Lena’s overall financial plan enables her to generate a financial return alongside meaningful impact to her and the causes she cares about most. The impact industry is growing and transforming, and it is likely that Lena’s impact philosophy will change over time.
We are committed to collaboration and believe it is a key component to any impactful investment strategy.
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Our case studies are for illustrative purposes only and should not be considered as investment advice. The information provided is hypothetical in nature, does not reflect actual investment results, and is not a guarantee of future results. No reliance should be placed on any such information when making an investment decision. Information provided has been fictionalized for confidentiality. It is not known whether the listed client approve or disapprove of SHWM or the advisory services provided.