Amanda DiChello, a member of Cozen O'Connor’s Private Client Services Practice, discusses trustees’ growing interest in sustainable investing in Private Wealth. Environmental, sustainable, and corporate governance (ESG) investing, and socially responsible investing (SRI) and impact investing are becoming increasingly popular among trustees; however, the question remains if a trustee can meet their fiduciary duty to maximize returns with these types of investments.
“A trustee’s sole obligation is to focus on returns. How does ESG investing fit into that? It is a question trustees are struggling with,” Amanda said. “For instance, what if oil and gas prices are high? The trust or foundation should be invested in it, but the family that established the trust may be uncomfortable with those investments.”
According to Amanda, “the trustee needs to seek preferred investments that are equally profitable to traditional investments, which can be done in part by diversifying the portfolio in the ESG space.”
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