Sustainable and responsible investing continues to claim a growing portion of investments in the US, now at over one-fifth of professionally managed assets — that’s $8.72 trillion out of $40.3 trillion — up 33% from one-sixth in 2014.
“Client demand is one of the major drivers for money managers that introduce products that take ESG factors into account,” cited by 85% of responses according to the US SIF’s biennial report.
Furthermore, investors embrace SRI strategies as a means of managing risks, fulfilling fiduciary duties, contributing to better environmental, social, and governance practices, promoting corporate responsibility, and building long-term value.
The power of ESG
The trend isn’t surprising. Word is getting out that ESG integration combines material benefit with positive impact. As more investors become aware of the possibilities, they’re asking advisors how to harness ESG.
ESG is a versatile tool for shaping investments to meet individual requirements. Applied with wisdom and finesse, it may optimize investments purely for performance, for ethical preferences, or a combination of both. Our studies show that it’s possible to create indices with positive impact that still capitalize on ESG’s material benefit, and particularly so when starting with the best data set.
SRI: the new normal?
There’s never been a better time to be a concerned investor. As our data and methods continue to evolve, it’s only getting better — which means that we’ll be able to help more and more average investors exercise their conscience.