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2020's Portfolio Management

April 08, 2021

   When doing financial analysis to select companies that are a good fit for our portfolio models, we add environmental and social factors to the process.  Evaluating the health of a company and its prospects for growth and share price appreciation should logically involve all available data to have the best results.  It is not surprising that more and more financial analysts, funds and portfolio managers are integrating ESG into their research. 

   Looking at fundamental factors such as revenue growth, profit margins and cash flow is the foundation for good research.  Adding environmental research broadens the picture.  Not only can we get a better idea of which companies are part of the solution towards sustainability, but we we can potentially find hidden environmental risks such as lawsuits from contamination of land, property or water.  Looking at social factors can give us an idea of workplace safety which is correlated with worker productivity and lessened worker's comp claims.  Evaluating a company's board to make sure there is independence can also be an indicator of company health with the benefits that independent perspectives have on strategic planning and overall decision making.

   At Conscious Investment Services, we start with macroeconomic, fundamental and technical analysis.  Then we are able to tap into the increasingly available ESG databases to select only the best best companies that excel in all areas.