How firms can effectively communicate an ESG value proposition

It's critical for wealth management firms to create authentic and compelling narratives around their sustainable investing offerings.

As interest in sustainable investing continues to grow among investors, it’s critical for wealth management firms to create authentic and compelling narratives around their sustainable investing offerings to best communicate with clients.

Cerulli data show that nearly 30% more high-net-worth practices offered ESG capabilities in 2020 compared to 2015. How can firms communicate these capabilities in a way that adds to their value proposition and resonates with clients while helping facilitate impactful ESG conversations?

A good way to start is by assessing how five key pillars — values, performance, risk, impact and engagement — fit with the firm’s branding, focusing on the pillars that are most relevant to the firm’s overall value proposition and specific point of view on sustainable investing.


Incorporating the concept of values in a firm’s messaging shows it can help with investment decisions consistent with the principles that guide clients’ other life decisions. Focusing on values can give firms flexibility to meet investors where they are, across the variety of causes an investor base may care about. For firms that lead with sustainable investing in their value proposition, this is the most important pillar, and Fidelity research found that nearly 70% of firms who offer sustainable investing emphasize it in their website messaging.

Therefore, it’s critical to articulate how the firm works to align investments with values. This may include using tools that help clients express which specific causes are important to them and where they find fulfillment. Firms that specialize in market niches that may hold common values with their clients can consider highlighting those details in their messaging as well.


At Fidelity, we hear from advisers that a common question they get from clients is, “How will sustainable investing impact my portfolio returns?” Performance is, of course, important to investors. Firms can give clients a clearer understanding of how sustainable investing could impact their portfolio by explaining their approach to ESG investing strategies, including how they choose investments and identify companies with potential for success.

Firms that mention this pillar often, which is the case with nearly half of the firms Fidelity reviewed, emphasize the potential to use ESG metrics to identify well-run companies. On the flip side, around a quarter of firms highlight sustainable investing as a strategy that uses ESG data to identify companies that are not managing risks well. This can also help investors better understand how the advisor intends to manage potential risks in their portfolio.


More than 40% of affluent households prefer to invest in companies that can point to a social or environmental impact, according to Cerulli. When marketing ESG investing capabilities to clients, there’s an opportunity for firms to emphasize the effect that clients’ investments could have on issues that are important to them and how they will inspire positive change a pillar that only a third of firms are highlighting with clients and prospects, according to our research.

That said, a challenge for firms who go this route is to be sure that there is alignment between the issues that matters to their investors, such as social, environmental or political change, and the available investment vehicles. Firms with a strong charitable giving offering could consider leaning in on this pillar and highlighting sustainable investing as a way for clients to further contribute to the causes they care about and already support via philanthropic endeavors.


For some clients, understanding how investments will impact positive change around the issues that are important to them might not be enough – some also want to work with investment managers that actively engage with, and influence, companies. When researching firms that offer sustainable investment strategies, Fidelity found that while many fund managers emphasized this pillar, very few investment advisors position sustainable investing as a way to influence change at companies. That means emphasizing a high level of engagement could be a significant differentiator for the firms that have the capabilities to back it up, such as those that focus on funds with asset managers who look to meaningfully impact ESG factors by communicating with the companies in their portfolio about important issues.

When developing messaging about a sustainable investing practice, remember that each client has unique motivations, whether it’s creating impact through investments, aligning with their personal values, engaging in issues that are important to them or seeking security through returns. Thinking about client needs alongside how sustainable investing connects to a firm’s unique positioning is crucial for developing a compelling ESG value proposition.

Rick Smyers is managing director at Fidelity ESG Pro.