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Sustainable and impact investing

Aligning your investments
with purpose
Pursue positive change. Seek competitive returns.
More companies are changing the way they do business. They're examining not only their profit potential but also how their practices impact the environment and society at large.

Sustainable and impact investing offers you the opportunity to invest in companies that are working towards better ways of doing business with innovative approaches to support their long term performance.

Help to solve society’s biggest and growing challenges. Live out your beliefs. Invest to reflect issues that matter to you while pursuing your investment goals.
Play video on impact investing
—Is impact investing right for you? (3:38) | Read the transcript of the impact investing video (PDF)
It’s easy to start
A flexible approach and multiple investment options across asset classes make it easy for you to start investing for sustainability and impact.

Choose the impact approaches you prefer through our A-B-C framework.
  • Reduce negative social or environmental effects
  • Manage risk by limiting certain exposures
  • Support positive social or environmental practices
  • Enhance potential for long-term competitive financial returns
  • Advance positive, measurable social or environmental outcomes
  • Target opportunities where impact is intrinsic to financial performance
What you care about matters
Every investor has unique motivations for choosing to invest for sustainability and impact. In addition to seeking financial performance, you may want to:

  • Invest in companies with responsible environmental and social practices
  • Align your portfolio with your values or goals
  • Support specific issues or causes you care about
  • Target innovations that help solve social or environmental challenges
You can customize your sustainable investing strategy based on your preferences and motivations. You can then also explore and review the environmental, social and governance (ESG) profile of your investments via stock, fund and portfolio story.

Whether you invest a lot or a little, your investments can make a difference because you're part of a larger group of sustainable investors helping to drive meaningful change. Your portfolio can contribute towards responsible business practices and lead companies to be more environmentally and socially responsible.
The case for sustainable investing
  • Inflows into sustainable strategies over the next few decades could be roughly equivalent to the size of the S&P 500 today.1
  • Firms with good or improving environmental, social, or governance (ESG) characteristics have been shown to perform as well as — and may even outperform — their peers.2
  • Companies that are ranked higher by ESG data providers have generally seen lower future earnings volatility.3
  • Nearly two dozen emerging markets offer approximately $23 trillion in climate-related investment opportunities.4
  • Companies with good or improving social characteristics have, on average, outperformed companies with negative characteristics.5
  • While performance results have varied over time, companies with better scores on board diversity and management diversity saw consistently higher future return on equities than counterparts with lower scores.6
Make better informed investment decisions
Some investors worry that creating positive impact with their portfolio means giving up returns. However, sustainable and impact investing can often offer competitive performance7 and appropriate levels of risk8 compared to traditional investments.

Companies that incorporate environmental, social and governance (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. Their practices can even help mitigate the impact of risks beyond their control, like droughts, high energy costs, or labor unrest.9

Sustainable and impact investments at Merrill undergo assessments by our Chief Investment Office for the quality and competitiveness of the investment strategy.
What are we doing as a company?

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.

Next steps
Interested in learning more about impact investing?
Turn to us whenever you have questions or need help getting the most out of Merrill.
Looking for one-on-one advice and guidance to help you get and stay on track?
Work with a licensed Merrill Financial Solutions Advisor
Footnote 1 BofA Global Research, ESG from A to Z: a global primer. November 8, 2019.

Footnote 2 Hermes Investment Management, ESG investing: A Social Uprising, 2018.

Footnote 3 BofA Global Research, ESG Matters – US: Top 10 reasons you should care about ESG, September 2019.

Footnote 4 Governance & Accountability Institute, Inc., 2019.

Footnote 5 Hermes Investment Management, ESG Investing: A Social Uprising, 2018.

Footnote 6 BofA Global Research, “Thematic Investing: The She-conomy,” March 6, 2019.

Footnote 7 Hermes Investment Management, ESG Investing: A Social Uprising, 2018.

Footnote 8 "Climate change: The investment perspective." EY, 2016.

Footnote 9 "Deconstructing Risks in Impact Portfolios," Bank of America GWIM CIO, March 2018.

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.