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Managing Your Wealth—Are Your Investments Aligned With Your Values? If Not, Then Why?

Posted: Friday, September 4, 2015 – 8:44 PM

By Yolla Kairouz, Wealth Advisor,­ ­Wells Fargo Private Bank

A paradigm shift is in our midst; a shift is happening in how communities tackle and solve their toughest socioeconomic challenges. Underpinning this change is: an awareness by wealthy families and individuals of how they view their role in society; a growing workforce that wants to connect employment with meaning and purpose; and the realization that today’s issues need more than government and social services solutions.1 This tectonic shift is also taking place right here in Los Angeles and is a movement that brings together businesses, foundations, public sector leaders, and private investors to harness the power of entrepreneurship, innovation, and investment capital in an effort to target social objectives and generate financial returns. Traditionally investors held the view that profit and purpose were mutually exclusive. Today, there is a realization that there does not need to be a tradeoff between these two benefits and there are increasing opportunities for investors to align their investments with their values. So what are these diminishing barriers and strategies investors can adopt to incorporate some congruency with their values without sacrificing return on assets?

Lack of Awareness

Investing according to one’s personal values and beliefs is not a new phenomenon. Today, a growing collective force of wealthy families, individuals, and institutions are actively seeking and investing in profitable strategies and companies that employ social, environmental, and good corporate governance practices. One prominent example is Stanford University. Last year, Stanford announced it would divest its $18.7 billion endowment of stock in coal mining companies. In doing so, it became the first major university to participate in the nationwide campaign to reduce investments in companies and products that are perceived to damage the environment and contribute to global warming.2 This year Norway’s $890 billion government pension fund, followed by the Church of England, French insurer AXA, and members of the Rockefeller Family, also pledged to remove coal-related investments from its investment holdings.3 Conversely, in a move to address coal’s poor environmental image, the U.S. Department of Energy (DOE) announced recently that a group of carbon capture and storage projects supported by the DOE were successful in removing significant amounts of carbon dioxide from coal-fueled power plants.4 This milestone for the Department highlights the private and public collaboration aimed at developing innovative solutions such as clean coal technologies that investors and industries can rally behind.

Limited Number of Strategies & Access

If the first step towards change is awareness, then acceptance is the second step. Growing financial industry acceptance of this newfound awareness has resulted in an increased number of investment strategies that focus on socially responsibility and improved access to such investments. In response 1,276 asset managers, with a combined $45 trillion under management, have pledged and committed to incorporate environmental, social, good governance (ESG) companies into their offerings and processes.5 An increasing number of asset management firms, recently signed the United Nations Principles for Responsible Investment Initiatives thereby joining a league of global investors committed to incorporating (ESG) issues into their investment practice.6 Another recent notable example, Andreesen Horowitz and Impact America Fund seed financed $10 million for hairstylist online startup Mayvenn in South Los Angeles. This online platform empowers local hairstylists in underserved business communities to leverage technology to help them make money on products they sell like hair extensions, lower overhead costs, and serve more clients6. Suffice it to say, there is a growing platform of investment offerings for private investors, charities, pension funds, and foundations to incorporate socially responsible investment initiatives in their holdings, uphold their fiduciary responsibilities to their donors, and serve as the vanguard.

Investment Return vs. Social Good Tradeoff

Previous generations held the dichotomous view that achieving financial returns and personal values simultaneously was mutually exclusive. But this perception is disintegrating thanks to a growing marketplace of socially responsible and impact investing funds. One fund strategy, for example, is characterized by selecting large-cap companies that exhibit consistent growth, strong fundamentals, and high- quality earnings while demonstrating strong corporate responsibility. Companies may allow clients to select standard and/or custom parameters that permit them to screen companies for concerns such as animal welfare, extraction and faith-based initiatives. In the past, high research costs contributed to high fund fees and hence made some SRI funds less appealing. However, with the growing availability of data and firms increased transparency about their environmental and corporate governance, these fees have declined and, subsequently, net fund returns have improved.


Now, more than ever, there is a strong, growing awareness and acceptance that socially responsible investing and strong corporate financial performance are not mutually exclusive, but rather, mutually beneficial in many respects. In the past, lack of awareness, poor access to strategy, and lackluster returns offered investors limited opportunities to align their holdings with their personal values. However, thanks to technology, public and private sector partnerships, and improved transparency and research data, investors have an increasing number of attractive investment opportunities that will help them leverage their wealth to support their values, participate in a movement that will help them and their families make an impact, and still earn meaningful financial returns.

Reach Yolla Kairouz at 310-285-4554,

Wells Fargo Wealth Management and Wells Fargo Private Bank provide products and services through Wells Fargo Bank, N.A., and its various subsidiaries and affiliates. The views expressed by the author are her own and do not necessarily reflect the views of Wells Fargo or its affiliates. This information is for educational purposes only and should not be used or construed as financial advice, an offer to sell, a solicitation of an offer to buy, or a recommendation for any particular product or service. 


1. Impact Investments: The Invisible Heart of Markets; Report of the Social Impact Investment Taskforce. September 15 2014

2. endowment-of-coal-stock.html

3. change-will-divest-from-coal.html

4. permanently-store-10-million-metric-tons

5. UN Principles for Responsible Investment, PRI fact sheet. fact-sheet

6. million-series-a-from-a16z/

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