How far advanced is the wealth management industry in embracing ESG - are we at the early stages still or are there already signs that it is maturing and becoming “mainstream”? 
We are still in the relatively early stages of adoption because there is some heavy-lifting still to be done. We need to make sure that everyone is using the same “language”; that everyone understands that there are no trade-offs between investment performance and social/environmental impact; that there are good quality strategies to deploy; and we need to have good ways to measure both financial and social impacts.

Within impact investing, what sort of options are typically available for clients - are there standardized types or is it still bespoke?
It’s critical to understand that impact investing can be done across asset classes.  Whether public equities and debt, private equity and VC, or real estate and cash, impact investing can be achieved. The key is that the investments are intentional, measurable, and additive to social progress.

What’s your assessment of the state of ESG reporting to clients today? Is it still primitive or getting more advanced? Does the information convey information that’s clear and engaging? Can the data show if the investment manager is adhering to stated principles or deviating from a particular benchmark?
ESG reporting is still in very early days. The primary problem is that we don’t currently have standards for data disclosure by corporations. This is moving forward thanks to organizations like the SASB and the GRI. But we’re still fairly far from getting the consistent, accurate, comparable, projectable, and decision-useful information that investors need. The data is a starting point for managers to use in their research efforts. While there is insight from the current data, it cannot give enough predictive insight as a standalone resource.

Quite a few ESG investment strategies seem to fall into two camps: qualitative, requiring the manager use his/her judgement, and quantitative, where certain metrics and data points are followed. Do you see a trend favoring one or more of such approaches?
It absolutely must be both!

Is there a risk that a lot of ESG investing will be heavily biased towards listed equities because these markets are public, have high levels of disclosure, and investors could risk being underweight bonds, private capital markets, real estate, etc? What can be done to address this?
No. An asset allocation discussion is one that is done separately from an investment policy statement.

Are there regions of the world most suited to ESG investing or which exhibit particular attractions for ESG investors?
Japan has been an extreme example of poor governance. Brazil has been an example of the possibilities of environmental issues from the leading companies. The Nordic nations are wonderful to consider progressive social issues.

What is your firm doing to train and educate staff about ESG so that they can incorporate these ideas into how they talk to clients, analyze investments and manage portfolios? Are there talent shortages and skill gaps, and how are you trying to deal with these?
Cornerstone was explicitly founded as an impact investment advisor. All of our employees, executives, researchers, board members, advisors, recruits, and partners are steeped in an understanding of sustainability and impact. The key is purpose.

When you start to talk to clients, who typically raises the ESG subject first? Have you noticed any shift over recent years?
Investing first. Then investment policies…that leads to ESG discussions.

Is it getting easier to benchmark the performance of ESG investments? Does the work of groups such as Global Impact Investment Network and others help?
Absolutely. We use the standard benchmarks. Since you need not sacrifice investment returns for social impact, we can use the S&P, the MSCI ACWI, etc.

There are several sustainable development goals laid out by the UN. Can all of these be easily incorporated into an ESG portfolio? If not, how can they be used?
The 17 SDGs are a high-level aspirational framework to address the world’s greatest challenges. As they are not directly investible, other frameworks, like Cornerstone’s, are required to bring the SDGs down to the industry level, the company level, and the manager level. Then the SDGs become possible!  It’s definitely not easy, but it is achievable!

A lot of firms seem to be offering ESG funds and starting initiatives. Some of this may be sincerely motivated, but clients might surmise that some of this could be about marketing and image building. What should firms do to break through such arguably healthy skepticism?
The skepticism is definitely warranted, because the products being introduced can be quite superficial and not consider the real complexity required to analyze sustainability and impact. Simplistic screens that try to use a single ESG factor to construct a portfolio are very poor strategies for investment. In fact, if they underperform, they actually undermine the economic outcomes we’re trying to achieve.

How should private banks, advisors suggest that clients integrate ESG with the rest of their financial “balance sheet”, such as their spending habits, management of operating companies, philanthropy, etc? 
Longer, individual conversations. Net-net, the key is the investment policy work, linked to the asset allocation work, linked to thoughtful selection and diligence of strategies.

What should be done to provide clients with a directory of ESG practitioners and wealth managers with ESG capabilities so they have an idea of where to start?
Start with a firm that does not see sustainability, impact, and ESG as a tangent to what they do. Start with serious, dedicated, and purpose-built expertise.