In our last two blogs on environmental, social and governance (ESG) investing we discussed the what and how of ESG investing. In our final blog of the series we are going to explain why ESG investing is important for investors and for the future of the entire investment landscape.
The adoption of ESG investment criteria in the investment community has hit a critical mass. Today, funds employing some form of sustainable investing strategy hold 25% of a company shares1.
Given that 2/3rds of investors under the age of thirty prefer their investments have a positive social or environmental impact (and that $30 trillion in investment assets are going to be inherited from baby boomers), this ownership share will likely grow. As it does, corporations will increasingly be pressured to adhere to the mandates of ESG investors. And as asset managers evolve to meet ESG investment demand, companies not meeting the mandate of ESG investments will fall out of favor with Wall Street. In short, ESG investing is changing both the way investors evaluate companies and the way companies prioritize their actions.
We manage ESG strategies because we believe that ESG investing is the right thing to do, the prudent thing to do and the responsible thing to do. Recent studies showing ESG’s beneficial returns support this belief.
So why invest in ESG? Given the evidence, the question we would ask is, “why not?”
Interested in learning more about ESG? Download our Free Guidebook below.
This is the third blog in a series on ESG Investing. If you are interested in reading the other 2 blogs in this series, view them here: What is ESG and How Are ESG Funds Managed.
1https://hbr.org/2019/05/the-investor-revolution