Together, Merrill Lynch Wealth Management and U.S. Trust now offer more than 180 ESG-themed investments to individual and institutional investors, including mutual funds, exchange traded funds, separately managed accounts, and alternative investments. These offerings are organized around three key themes:
- Environmental Stewardship – examining use of water, alternative energy, climate change and clean tech;
- Human Capital Practices – including “gender lens” investing (investments focused on improving the lives of women and girls) and faith-based investing; and
- Corporate Governance – focusing on corporate transparency, disclosure, reporting and incentives.
In early 2013, U.S. Trust launched a proprietary strategy called Environmental Stewardship and Sustainability (E2S) with Jason Baron, portfolio manager. This strategy identifies thoughtful stewards of the environment by assessing energy practices, carbon footprint reduction, and process efficiency.
“In creating this strategy, we responded directly to client demand,” said Chris Hyzy, U.S. Trust’s chief investment officer. “We believe that corporations dealing effectively with environmental issues are poised to do well relative to their industry peers.”
That followed the launch of “Socially Innovative Investing” (S2I), also managed by Baron. S2I is a proprietary, customizable strategy that allows U.S. Trust and Merrill Lynch Wealth Management clients to deploy a proprietary set of positive investing screens. As of March 2013, the strategy had grown to approximately $600 million in assets.
For Merrill Edge clients, a new landing page now houses all ESG-related products and services. For self-directed clients who like making their own investment decisions, Merrill Edge identifies socially responsible investing (SRI) options in its mutual fund and ETF screens.
In addition, Merrill Lynch Wealth Management now offers an SRI proxy voting service, at no additional charge, for clients with certain types of accounts. By completing a simple form, these clients can delegate proxy voting authority to a service provider who will vote proxies on their behalf, following SRI Guidelines. SRI Guidelines reflect a broad consensus of the socially conscious investing community and help to assess environmental, social and governance risks.
To build these and other ESG solutions, Bank of America taps into the thought leadership of its ESG Council, created in 2012 and comprised of a broad range of experts and leaders throughout the organization. The council includes Sarbjit Nahal, BofA Merrill Lynch Global Research’s director of Thematic Investing, who has led the industry’s No. 1 ESG team for the third year in a row, as ranked by Institutional Investor magazine. His team recently published papers on a wide range of related megatrends, including water, obesity, safety, extreme weather, and energy efficiency, and has also developed ESG screening tools on CO2, geographic risk and the ESG Consensus.
More information is at http://www.merrilledge.com/socially-responsible-investing.