Our collective investment decisions can together have a big impact on our society and on our environment for good or ill. Investors who take this into account are better equipped to take advantage of a changing world, to reduce their exposure to environmental, social and corporate governance risks, and to match their investments to their values. Contrary to a widely held belief, White Pine Advisory does not think there is a trade-off between sustainability and investment returns for long-term investors. In fact, a well-designed sustainable portfolio can outperform a more conventional portfolio over the long term.

Interest in sustainable investing is growing, but many individual and institutional investors lack the knowledge to implement its principles and methods in their own portfolios. White Pine Advisory works to fill this need by offering guidance and recommendations on building a sustainable portfolio. Additionally, by setting an example and offering guidance in sustainable practices the firm will enable its clients to reduce their carbon footprints in daily life.

Sustainability begins at home; therefore White Pine Advisory will build sustainable investing and sustainable practices into its business model from the very start. This is not just a matter of building a business that reflects our values. It is also good business practice. An integral and authentic approach to sustainability is fundamental to establishing credibility on these issues and to building the expertise that our clients require.

Sustainable investing for our clients

White Pine will begin a client relationship with an assessment of the client’s goals and values and how they should be reflected in an investment portfolio that is individually tailored for each particular client. Sustainable investing remains largely synonymous with exclusion of undesirable countries, sectors and companies (“negative screening”). While this can be an efficient and straightforward way of ensuring that an investment portfolio reflects its owner’s values, “positively screened” investing, focused on seeking out the companies that are actively contributing to a more sustainable future can deliver both sustainable portfolios and better long-term performance.

We further believe that a low turnover, long-term oriented, investment strategy is key to delivering positive returns over the long run. White Pine will prioritize low turnover strategies in choosing actively managed funds as their longer term orientation is a key element of successful and sustainable investing.

White Pine does not at this point have the resources to research individual companies or alternative investments properly and so will focus on publicly available mutual funds, index funds and exchange traded funds (ETFs). Funds will be recommended to clients based on suitability for the client’s investment profile, fundamental considerations such as cost and the likelihood of continued strong performance and, of course, sustainability. An increasing number of explicitly sustainable funds is becoming available to retail and small institutional investors in the US. Many are simply Exclusion funds, in which case a screened index fund or ETF may be available that covers the same market segment with the same exclusions but at a lower cost. Others are positively screened funds that seek out companies that can be considered Best in Class. Unfortunately, a number of funds of this type suffer from both high fees and poor historic performance and so would not be appropriate options. Still other funds are not explicitly labelled as sustainable yet are appropriate for a sustainable portfolio because of their particular investment mandate. A fully sustainable investment portfolio would likely be comprised of all three of these types of funds.

Sustainability begins at home

In order to reduce the carbon footprint of its business, White Pine will initially set up shop in a location that is readily accessible by public transportation and as it grows will continue to do business in a similarly accessible location. White Pine will also avoid the use of paper to the extent possible by using exclusively electronic means to communicate with clients, who will need to “opt in” if they wish to receive paper statements and other documents. White Pine will purchase all of its electricity from clean energy sources (now possible in a number of towns in Massachusetts) and will use energy efficient lighting and office equipment to the extent possible. White Pine will always be searching for ways to improve the sustainability of its business practices.

The secondary expertise in sustainable business practices that White Pine will be developing as described above will enable us to offer clients guidance in cost effective ways to reduce their own carbon footprints. White Pine is working to develop relationships with energy consultants and other specialists so that our clients are able to tap into their expertise. This will enable us to offer a comprehensive approach to sustainability, although it  will not become a core business for us.

Interested in Learning More?

617-505-5212
ularson@whitepineadvisory.com

White Pine Advisory, LLC
32 Kilsyth Road 2nd Floor
Brookline, MA 02445