Raising The Bar For ESG Investing Expectations
Monday, November 28, 2016
For years, many investors assumed that choosing environmental, social and governance (ESG) investing came with a cost—a performance shortfall. Based on our recent survey, that picture has changed.
In the 1990s and early 2000s, most investors believed that choosing responsible investing required them to pass up some amount of performance. In fact, this concern was so common that the word performance was mentioned in one-third of all responsible investing news articles published from 1982 to 2009. That’s more than the references to any other term.*
In just a few short years, as ESG investing has gained more traction, there’s been a noticeable shift in performance expectations for this approach.
Most Investors Expect Similar—or Better—Returns from ESG. Today, the notion that investors have to settle for less with ESG returns seems to have all but disappeared. We surveyed more than 60 North American institutional asset allocators, and the responses clearly showed that most investors no longer think they’ll need to trade off competitive performance when choosing ESG investing.