Value-based investing goes by many names: Socially Responsible Investing (SRI), ESG Investing (which considers environmental, social and governance factors), Sustainable Investing, or, as we call it, Values-Based Sustainable Investing (VBSI). Whatever the label, its core purpose is the same: to help investors align their financial decisions with their personal values.
Recently, these approaches have faced increasing political and regulatory challenges. Disclosure requirements related to climate and sustainability risks have been reduced, some fiduciaries have been discouraged from considering ESG-related factors in investment decisions, and shareholder advocacy efforts have come under greater scrutiny.
Yet despite these headwinds, interest in values-based investing continues to grow. Because for many investors, this isn’t about politics. It’s about legacy.
One of the largest wealth transfers in history is now underway. Over the next two decades, Baby Boomers are expected to pass tens of trillions of dollars to their children and grandchildren. Those heirs will inherit much more than financial assets. They will inherit the values, priorities and life lessons that shaped how that wealth was created and managed.
By aligning investments with your values, you have an opportunity to pass on not only wealth, but also a framework for making decisions in the years ahead.
Let’s begin.
1: Bring the Next Generation Into the Conversation
For many families, discussions about money and inheritance remain uncomfortable. But avoiding those conversations often leaves heirs unprepared for the responsibilities that come with wealth.
Consider involving your children or grandchildren in conversations about your financial plans. Start informally and, over time, include your financial planner and estate planning attorney. Rather than focusing solely on what they will inherit, discuss why you made certain financial decisions and what principles guided you along the way.
2: Learn What Matters to Your Family
The next generation often has its own concerns and aspirations. Some may be passionate about climate change, biodiversity, public health, education or community development. Understanding what matters to them can help create a smoother transition of both assets and responsibility.
Ask questions. Listen carefully. How do they define success? What role do they believe investments should play in shaping the future?
3: Align Your Investments With the Legacy You Want to Leave
If you believe your heirs are likely to invest according to their values, consider taking steps to align your portfolio today. Doing so can serve as a living example of how financial goals and personal convictions work together.
Many retirement assets, including IRAs and 401(k) accounts, can often be repositioned without immediate tax consequences when handled properly. More importantly, aligning your investments now can help ensure that the wealth you pass on reflects not only your financial success but your deepest priorities.
You have a unique opportunity to shape that legacy while you’re still here. Why not use it to pass on not only your wealth, but your values as well?
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