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Advisor Insights

Q&A: Pushing Companies to Be ESG Aware

Courtney Ranstrom, MBA, CFP, the co-founder of Trailhead Planners, encourages active ownership when it comes to ESG issues.

Editor’s note: This is one in a series of Q&As with financial professionals about how they’re incorporating environmental, social, and governance factors into their investing approaches and their views on ESG risk.  

Financial planner Courtney Ranstrom founded her firm, located in Portland, Oregon, and Minneapolis, with her brother, Morgan Ranstrom, in 2016. From the get-go, Ranstrom has sought to make ESG a prominent part of her practice, saying that investors should push companies to be more conscious of their environmental impact and the long-term risks their businesses face.


Do advisors have a responsibility, fiduciary or otherwise, to consider ESG risks when investing for clients?
I think advisors have a responsibility to evaluate risks associated with the securities in which they invest. ESG risks should be a component of their overall evaluation. However, this area is still relatively new with disagreements on how to include ESG. More work will need to be done to fully integrate ESG risk factors, and how to quantify them, into investment analysis. 

How do you integrate ESG into your practice?
We don’t require that our clients tilt toward ESG investments, but we offer it for our clients who want it. We get a lot of demand for it, particularly with our Portland-based clients. Personally, I believe investors need to push companies to be more conscious of their impact on the environment, the long-term environmental risks their businesses face, and their responsibility in creating work environments that are profitable for the company while being representative and inclusive. 

How does discussing ESG help your clients?
Talking about ESG factors with clients is a great way to get to know them, their goals, and their priorities. It also helps them learn about the investing process and feel empowered in the decisions they are making with their investments. 

What questions and concerns about ESG do you hear most from clients?
What is ESG? Is it the same as SRI [socially responsible investing]?

What’s the biggest challenge you face incorporating ESG into your practice?
There still doesn’t seem to be consensus on what constitutes ESG and how it is different from SRI. There is a lot of confusion over what ESG is and how to screen for it. We need consistent language and metrics, which will help investors evaluate ESG factors and apply them consistently.

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