Advisors see increased interest in Responsible Investing

ESG investing could drive new business for advisors

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Oct 22, 2018, 12:37 ET

BOSTON, Oct. 22, 2018 /PRNewswire/ -- Responsible Investing continues to be a key area of focus for financial advisors according to the latest Eaton Vance Advisor Top-of-Mind Index (ATOMIX) survey of more than 600 advisors, with nearly eight out of 10 (79%) reporting they incorporate Responsible Investing into their practices. Of those, 44% said it is an important part of their practices, up from 31% in Q2 2018. Thirty-five percent reported increased interest from clients and 60% said Responsible Investing is an ongoing topic of discussion.

"Responsible Investing strategies allow advisors to take a more holistic approach to wealth management with their clients," said Anthony Eames, director of responsible investing strategy at Calvert Research and Management. "As Responsible Investing gains in popularity, there's increased dialogue between advisors and their clients."

More than half (56%) of advisors said Responsible Investing is driving new business to their practices, yet only 35% classified themselves as "very well-informed" about Responsible Investing.

"We are working to bridge this information gap by offering advisors enhanced tools and educational programs," said Mr. Eames. "Offering a full suite of Responsible Investing solutions can be a key differentiator for advisors trying to deepen and expand their client relationships."

Research powers Responsible Investing
Advisors recognize the value of both qualitative and quantitative research behind Responsible Investing products. Eighty-seven percent said a robust research program is important to Environmental Social Governance (ESG) analysis, but 67% said it is difficult for investors to obtain measurable quantitative sustainability data from companies. Moreover, 54% admitted they don't understand the connection between ESG performance and financial performance.

Jessica Milano, director of ESG research for Calvert Research and Management, argues there is a direct correlation between a company's financial performance and its commitment to its customers, workers and the broader community it serves.

"Financial materiality is the key to effective, impactful ESG research," said Ms. Milano. "Calvert's proprietary research process leverages multiple data sources to capture and analyze ESG factors that drive company financial performance over the long term.

"Data show that firms that optimize their ESG practices tend to be rewarded for their efforts, along with their shareholders," continued Ms. Milano.

Material and measurable results are also critical; 93% of advisors said demonstrating the impact of ESG investments is important to them and their clients. Taking an active role factors into Responsible Investing outcomes, with 82% of advisors stating it is important to engage with company leadership to drive positive business and ESG outcomes.

"It's important to recognize that not all ESG strategies are created equal," said Mr. Eames. "Our investment strategies follow the Four Pillars of Responsible Investing – performance, research, engagement and impact – which empower investors to seek competitive returns with portfolios that reflect their values and help drive measurable, positive change."

Eaton Vance ATOMIX Methodology
ATOMIX is calculated based on the findings of a survey of 618 financial advisors from a diverse group of companies. Eaton Vance contracted with a third party to conduct the online survey from August 20, 2018 – September 7, 2018. ATOMIX uses a similar methodology as the U.S. Consumer Confidence Index* (which has no affiliation with Eaton Vance) in that it calculates a weighted average of current perceptions (40% of the Index) and what advisors think about the trends (60% of the Index). The Index set a baseline average of 100 for April 2014. Each component measured is tracked quarterly to illustrate changes in advisor perceptions and changes in trends over time. Future surveys will sample different financial advisors and may produce different results.

About Eaton Vance
Eaton Vance Corp. (NYSE: EV) is a leading global asset manager whose history dates to 1924. With offices in North America, Europe, Asia and Australia, Eaton Vance and its affiliates managed $459.8 billion in assets as of September 30, 2018, offering individuals and institutions a broad array of investment strategies and wealth management solutions. The Company's long record of providing exemplary service, timely innovation and attractive returns through a variety of market conditions has made Eaton Vance the investment manager of choice for many of today's most discerning investors. For more information, visit eatonvance.com.

About Calvert Research and Management
Calvert Research and Management is a leader in Responsible Investing, with approximately $15.3 billion of mutual fund and separate account assets under management as of September 30, 2018. The company traces its roots to Calvert Investments, which was founded in 1976 and in 1982 became the first fund family to launch a mutual fund to avoid investment in companies doing business in apartheid-era South Africa. Today, the Calvert Funds are one of the largest and most diversified families of responsibly invested mutual funds, encompassing actively and passively managed U.S. and international equity, fixed and floating-rate income, and multi-asset strategies. Calvert Research and Management is a wholly owned subsidiary of Eaton Vance. For more information, visit calvert.com.

* The monthly Consumer Confidence Survey®, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The Consumer Confidence Index was started in 1967 and is benchmarked to 1985=100. The Index is calculated each month based on a household survey of consumers' opinions on current conditions and future expectations of the economy. Opinions on current conditions make up 40% of the Index, with expectations of future conditions comprising the remaining 60%.

Before investing, investors should consider carefully the investment objectives, risks, charges and expenses of a mutual fund. This and other important information is contained in the prospectus and summary prospectus, which can be obtained from a financial advisor. Prospective investors should read the prospectus carefully before investing.

SOURCE Eaton Vance Corp.