NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Wednesday, October 1, 2014

So-called “responsible” investing is gaining cred both with retail investors and institutional investors. But as Cerulli Associates points out in a recent report, the question is whether growing interest in green or responsible investing will translate into more investible opportunities in this space.

Specifically, the Boston-based financial services consultancy framed the question under the rubric of environmental, social, governance (ESG) strategies. ESG investing is one of several approaches within the responsible investing sphere that includes socially responsible investing, mission-related investing, impact investing and program-related investing.

Formerly viewed as a niche corner of the investing universe, ESG investing and its cousins have become almost mainstream as greater numbers of investors rally around the notion that companies tarred by environmental problems, worker and product safety issues, shady business practices, equality concerns and the like present portfolio risks.