ESG: Fad or Future?
The trend over recent years is impossible to ignore: ESG investing has been gathering steam. There have been record flows into ESG investments, companies in ESG sectors have registered impressive valuations and thousands of asset managers and owners have signed on to the UN Principles For Responsible Investment (PRI). Environmental sectors are outstripping growth in the overall economy and ESG-focused funds are outperforming their counterparts. There is a convergence of driving factors that already point to this being more a genuine lasting shift than a short-lived fad.
Crossing the Rubicon
In financial markets, the notion of a performance penalty for ethical investing is now being superseded by recognition of a performance premium. And last year, three of the world’s biggest pension funds joined the ranks of managers which have decided to put ESG metrics at the heart of their strategies.
“It’s now crossed the Rubicon to become a fundamental precept of investing going forward. ESG is going to become as important as EPS in investors making decisions on public equities and fixed income securities,” says Jeff McDermott, Head of Nomura Greentech.
Read more @Reuters
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