2022 Vision Investing

Making your personal beliefs a strategic priority

Download the report (PDF)

2022 Vision Investing

Making your personal beliefs a strategic priority

Download the report (PDF)

Interested in a comprehensive approach to investing that reflects your values and interests? Read our Vision Investing report to get a closer look at how certain investing strategies may help you confidently integrate your beliefs into your portfolio without sacrificing performance.

Key takeaways

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Sustainable investment assets have nearly quadrupled since 2015Footnote 1
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Environmental, Social and Governance (ESG) factors are becoming essential in assessing investment risk and opportunity
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Investors may not have to forgo returns to align their investments with their values

What is Vision Investing?

There are a wide range of investment strategies that can help align financial objectives with personal values. We define our approach as "Vision Investing" which encompasses three key pillars: values alignment, investing with impact, and Environmental, Social and Governance (ESG) integration.

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This chart shows the performance of the S&P 500 index, MSCI All Country World index, MSCI ACWI ESG Leaders index, and the S&P 500 ESG index in the form of line charts. The horizontal axis shows years and the vertical axis shows index level. These indices are indexed at 100 with the S&P 500 ESG index outperforming the others from 1/1/2015 to– 12/31/2021. All four lines appear relatively flat through 2016, and then start to rise gradually in 2017 to around 125-130. Between 2018 and 2020 the MSCI All Country World Index line lags the other three index lines and starts to diverge. All lines show a bit of fluctuation over this period. The S&P 500 index, MSCI ACWI ESG Leaders index, and the S&P 500 ESG index rise to around 150-155 by the end of 2019. The MSCI All Country World index lags at around 130. All four lines show a dip in March 2020 due to the pandemic, and then all four lines climb through year-end 2021 with a few slight pullbacks over the period. At the end of 2021, the S&P 500 index and the S&P 500 ESG index are above 200, the MSCI ACWI ESG Leaders index line is 200, and the MSCI All Country World index lags the others and is around 170.This chart shows the performance of the S&P 500 index, MSCI All Country World index, MSCI ACWI ESG Leaders index, and the S&P 500 ESG index in the form of line charts. The horizontal axis shows years and the vertical axis shows index level. These indices are indexed at 100 with the S&P 500 ESG index outperforming the others from 1/1/2015 to– 12/31/2021. All four lines appear relatively flat through 2016, and then start to rise gradually in 2017 to around 125-130. Between 2018 and 2020 the MSCI All Country World Index line lags the other three index lines and starts to diverge. All lines show a bit of fluctuation over this period. The S&P 500 index, MSCI ACWI ESG Leaders index, and the S&P 500 ESG index rise to around 150-155 by the end of 2019. The MSCI All Country World index lags at around 130. All four lines show a dip in March 2020 due to the pandemic, and then all four lines climb through year-end 2021 with a few slight pullbacks over the period. At the end of 2021, the S&P 500 index and the S&P 500 ESG index are above 200, the MSCI ACWI ESG Leaders index line is 200, and the MSCI All Country World index lags the others and is around 170.

You don't have to trade profits for principles

A common misconception is that investors must sacrifice performance to align portfolios with their values; however, a growing body of evidence suggests the contrary. As shown in the graphic, adjusting for certain fundamental differences such as style and sector, U.S. and International ESG stocks showed comparable returns to those of other stocks.

ESG investing

ESG investing

ESG investing considers environmental, social, and governance factors that offer financial performance and benefit society. Typical ESG categories are shown below. It’s important to understand ESG data and engagement before making investment choices. The data can be challenging to track, which prompted our Wells Fargo Investment Institute team to develop a proprietary assessment framework to analyze a firm’s ESG offerings.

Environmental
  • Climate change
  • Green building
  • Renewable energy
  • Water stress/pollution
Social
  • Consumer protection
  • Diversity & inclusion
  • Labor standards
  • Privacy & data security
Governance
  • Board structure
  • Business ethics & fraud
  • Corruption
  • Executive compensation

Invest with impact

Investing with impact

Investing with impact uses investments to generate identifiable, measurable impact and financial returns. It's investing in a way that actively seeks to do good.

Our team considers a range of factors when assessing consistent corporate engagement which often signals the potential for impact:

  • Disclosing ESG data over multiple years
  • Addressing climate change via commitment to a low-carbon economy
  • Fostering a diverse culture to drive innovation, creativity and problem solving
  • Demonstrating effective governance of its board, caring for shareholders' rights, addressing executive compensation

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Values alignment

Values alignment

Values-aligned investing seeks to go beyond financial returns to further a societal or values-based goal, such as divestment from a particular company, sector, or industry, or overweight exposure to certain companies. And of course, the values vary by investor. Recent research conducted with Gallup shows a range of issues that are important — from worker’s rights to gender equality to religious values.



This chart shows a portion of the results of the 2020 Wells Fargo/Gallup investor poll for 9 different factors. These factors consist of reducing pollution, promoting responsible corporate governance, promoting racial equality, promoting gender equality, promoting LGBTQ rights, promoting certain religious values. The chart focuses on three of the nine factors. Specifically the top factor which was reducing pollution with 45% of survey respondents responding with “very interested” and 36% responding with “somewhat interested”. The fourth factor which was promoting racial equality with 40% of survey respondents “very interested” and 32% responding with “somewhat interested”. The seventh factor which was addressing climate change with 39% of survey respondents “very interested” and 24% responding with “somewhat interested”.This chart shows a portion of the results of the 2020 Wells Fargo/Gallup investor poll for 9 different factors. These factors consist of reducing pollution, promoting responsible corporate governance, promoting racial equality, promoting gender equality, promoting LGBTQ rights, promoting certain religious values. The chart focuses on three of the nine factors. Specifically the top factor which was reducing pollution with 45% of survey respondents responding with “very interested” and 36% responding with “somewhat interested”. The fourth factor which was promoting racial equality with 40% of survey respondents “very interested” and 32% responding with “somewhat interested”. The seventh factor which was addressing climate change with 39% of survey respondents “very interested” and 24% responding with “somewhat interested”.


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If you’re interested in building an investment strategy that better reflects your financial goals and values, our team of financial professionals can help. Let’s work together to find the best solutions for you.



Download the report (PDF)