Richard Zimmerman Discusses How to Select ESG Investments with FundFire

According to a new report by FundFire, investments in environmental, social and governance (ESG) strategies among high-net-worth investors will likely rise as younger investors inherit their families’ wealth and seek to align their portfolio with their values. With around $61 trillion in assets expected to pass from Generation X to millennial family members within the next 25 years, family offices must be prepared to help their clients integrate ESG into their portfolios.

To better understand how family offices can select the right ESG investments for their clients, FundFire recently spoke with WE Family Offices Advisor Richard Zimmerman. According to Zimmerman, assessing a family’s values is an important first step. To do this, he utilizes the United Nations Sustainable Development Goals to help clients identify the causes they are passionate about. From this assessment, Zimmerman typically creates investment policies for his clients that reflect their values to help construct portfolios.

Zimmerman then selects asset managers for these portfolios by conducting “normal” due diligence on managers to determine how good they are.

“What we add onto that is how intentional they are and committed to the ESG and impact space,” he explains. “What is their process for evaluating what they invest in and how deep and thoughtful is that process? What tools and data are they using?

Lastly, Zimmerman searches to find out whether the asset managers are intentional in their use of ESG, whether they have a dedicated team and how they are applying capital.

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