Using sustainable investment criteria alongside traditional financial analysis could offer a powerful way to uncover new investing opportunities; help better evaluate and manage risk; and align your investments to what matters most to you while seeking competitive returns.
Our approach
The world is rapidly progressing. Technological innovation across nearly every industry, from energy to infrastructure, is transforming the way we live and do business. It’s also presenting significant investment opportunities with those companies leading on the innovation front that are well positioned to grow.
Our suite of sustainable and impact investing solutions can help you invest in the momentum of this changing world with investments that incorporate sustainability analysis alongside traditional financial analysis to identify opportunities and potentially mitigate risks that could affect a company’s profitability. And if you’re looking to align your investments to your personal sustainability and impact preferences while pursuing competitive returns, we can help you do that too.
The Chief Investment Office due diligence team evaluates sustainable strategies and narrows down investments to those with a high probability of meeting or outperforming objectives.
Our Chief Investment Office due diligence process
The same investment standards as traditional investments, along with a second screen, are applied to sustainable investments to help ensure the competitiveness of the strategy and depth of ESG (Environmental, Social & Governance) integration.
- Quantitative review: We look at historical performance and risk compared to the market for an unbiased, numbers-based evaluation of each investment manager.
- Qualitative review: We go beyond numbers to look at investment manager credentials, investment processes and risk management approaches with the goal of identifying the best-in-class practitioners.
- Rigorous governance & oversight: A final, ongoing evaluation is conducted by multiple oversight committees — helping identify the highest-conviction strategies to offer our clients.
Aligning your portfolio to your personal preferences to create positive change
Sustainable and impact investing allows you to align your investments to your personal preferences. By looking across three broad categories — People, Planet and Principles of Governance — we can help you choose investing strategies that are focused on driving positive change in the world.
- People: Commitment to engaged and healthy workers and sustainable communities
- Planet: Contributions to climate and environmental sustainability
- Principles of Governance: Commitment to corporate ethics and societal benefit
Bank of America’s commitment to responsible growth
As one of the world’s largest financial institutions, we take a key role in building a more resilient future. Through our strategy of responsible growth, we are deploying capital towards a more sustainable economy — helping to create jobs, develop communities, foster economic mobility, and address society’s biggest challenges around the world.
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Frequently asked questions
While there are many possible definitions, Bank of America defines sustainable and impact investing as: “Investments that target competitive financial returns and seek positive social and environmental effects.” Other common terms include socially responsible investing (SRI); environmental, social and governance (ESG) investing; and values-based investing (VBI).
While they have some distinctions, they may share common elements of applying exclusionary screens, leveraging ESG strategies, and driving solutions that make a positive impact on society or the environment.
ESG stands for environmental, social and governance, and refers to commonly reported practices that companies and investment managers use to measure corporate sustainability. Investment strategies that incorporate ESG analysis along with traditional financial analysis are using more data to inform investment decisions. This can help you better manage risks — and avoid investing in companies with unsustainable business models or declining profitability due to these risks.
No. Modern sustainable and impact investments are designed to deliver competitive performance and appropriate levels of risk compared to traditional investments. Investment managers use ESG data from companies and data providers to review investments to seek out investments with strong ESG characteristics. Companies that incorporate material ESG factors into their decision-making have the potential to deliver competitive returns over the long term — because they’re focused on creating lasting value and are aware of the interest of a broad range of stakeholders.
No. Philanthropy or charitable giving is the act of giving money with no expectation for any return. Sustainable investing is investing that seeks to deliver both positive social and environmental effects while targeting competitive financial returns. Sustainable and impact investing is actually a powerful mechanism for creating meaningful change in society since it offers a mechanism for the markets to deploy and reinvest capital with purpose, thus creating the potential to scale and magnify the social and environmental impact.
This information should not be construed as investment advice and is subject to change. It is provided for informational purposes only and is not intended to be either a specific offer by Bank of America, Merrill or any affiliate to sell or provide, or a specific invitation for a consumer to apply for, any particular retail financial product or service that may be available.
The Chief Investment Office (CIO) provides thought leadership on wealth management, investment strategy and global markets; portfolio management solutions; due diligence; and solutions oversight and data analytics. CIO viewpoints are developed for Bank of America Private Bank, a division of Bank of America, N.A., (“Bank of America”) and Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S” or “Merrill”), a registered broker-dealer, registered investment adviser, Member SIPC and a wholly owned subsidiary of Bank of America Corporation (“BofA Corp.”).
There are many factors to take into consideration when building an investment portfolio and it's important to remember Environmental, Social and Governance (ESG) factors are only one component to potentially consider and should always be used alongside fundamental analysis.
Sustainable and Impact Investing and/or Environmental, Social and Governance (ESG) managers may take into consideration factors beyond traditional financial information to select securities, which could result in relative investment performance deviating from other strategies or broad market benchmarks, depending on whether such sectors or investments are in or out of favor in the market. Further, ESG strategies may rely on certain values based criteria to eliminate exposures found in similar strategies or broad market benchmarks, which could also result in relative investment performance deviating.
Risk management and due diligence processes seek to mitigate, but cannot eliminate risk, nor do they imply low risk.
