Investors may generally consider environmental, social and corporate-governance (ESG) issues as risks to a company’s financial performance and a further means of conducting due diligence when making investment decisions.
Given an increasing focus on ESG-related concerns, these issues appear to have gained greater financial relevance, sitting alongside other critical factors that may affect investment returns, including a company’s revenues, cash flows, creditworthiness, and operational performance.
As conducting ESG analysis may be considered a daunting task, considering the multitude of known, unknown, and debatable variables that underpin environmental, social and corporate-governance topics, more discrete criteria may be used to decide whether a particular company is either aligned with those values deemed important, and whether it is effectively mitigating ESG-related risks to protect or bolster its bottom line and generate positive returns.
As part of conducting a fundamental assessment of a company, IBKR’s Impact Dashboard enables investors to select those values they consider important, or very important, to them, and illustrates how these values align with the companies in which they have elected to include in their portfolios.
Moreover, in the Impact Dashboard, investors may also select business practices they would prefer to avoid, such as high-water usage, animal testing, weapons manufacturing, and hazardous waste, among many others.
View the video below for a detailed demonstration of how the Impact Dashboard functions and supports investors’ fundamental analyses:
As conducting due diligence can only help better inform investors’ investment decisions, factoring-in as many available, relevant variables as possible can help draw a more objective, and a more nuanced picture of the risk landscape.
For those investors with an eye on how ESG-related issues may be impacting their investments, and their values, IBKR’s Impact Dashboard provides a wealth of financially relevant – and ethically responsible – data.
Disclosure: Interactive Brokers
The analysis in this material is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IBKR to buy, sell or hold such investments. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.