ADVICE AND SERVICE FOR INDIVIDUALS
INCORPORATION OF ESG FACTORS
For clients interested in aligning their portfolios with their values, Federal Street works with clients to balance their financial return objectives with their social goals. We help clients determine the level to which they are comfortable explicitly incorporating Environmental, Social, and Governance (ESG) factors into the design of an investment program, discussing trade-offs, risks, and opportunities. We explore whether commingled vehicles such as mutual funds with standard ESG or sustainability criteria would be appropriate, whether traditional unscreened products can be used in part or all of the portfolio, or whether the client is best served by a customized solution in which he or she partners with a manager specializing in the area to design an individualized set of ESG criteria.
We also research and recommend managers that focus on a range of ESG issues. Federal Street engages in the same level of rigorous due diligence for managers focused on ESG factors as it does for traditional investment managers through our Manager Search and Selection process. Additionally, we evaluate the manager's ESG investing process and capabilities, including the source, depth, and independence of their ESG data, and the value they are able to add beyond standard stock screening, for example through shareholder advocacy or direct community involvement.
While our general recommendations reflect industry-standard ESG criteria, Federal Street monitors issue-specific products as well and can work with clients that have a particular focus in areas such as community investing, education, health, climate change, animal rights, or that may have specific religious restrictions. Additionally, Federal Street evaluates alternative investment opportunities such as social venture capital where appropriate and when available.