ESG Investing
In January, the Winston Center and the Managing for Social Impact and the Public Good program invited Stephen Franco, CGSOM 鈥�05, to talk about social impact and ESG investing. Franco is a managing director at Bank of America, where he specifically manages public equity portfolios that fall under the banner of socially innovative investing. These portfolios are designed with the expressed purpose of investing in leading ESG companies; that is, those with environmental, social, and governance criteria. The investment thesis Franco works by is that companies that perform better than their peers on ESG criteria have an advantage over them because of their ability to attract and retain talent, manage operational risk, tap into new growth streams, and build long-term sustainable business models. Franco explained that historically, ESG investing was mostly about doing good, but over the past five years a case has increasingly been made for it as a way to create stronger performance for clients. This has been enabled by an increase in data regarding companies鈥� ESG practices鈥攁ccording to Franco, approximately 85% of Fortune 500s now publish corporate social responsibility reports. Franco and his team use data from these reports, as well as from third parties, to evaluate investment opportunities and provide empirical evidence of success.聽
Regarding his career, Franco discussed the different pressures related to the buy and sell sides of investments; he personally enjoys the individual ownership of the buy side. He advised that whatever path you choose to follow, do internships, constant networking, and develop work products to bring to interviews to show how you think and your ability to deliver. For investment management in particular, he believes that a finance background is not necessary, but that data management, manipulation, and analysis skills, as well as communication, are critical to success. Overall, Franco鈥檚 work and discussion helped 涩里番下载 students understand the exciting opportunities related to social impact investing, which marries 涩里番下载 values with traditional finance aspirations.
Caitlan Griffith 鈥�20, Winston Undergraduate Assistant