• jordancrahan

ESG Investments Hold Their Own During The Downturn

Updated: Apr 30, 2020


THE SOURCE


Greenbiz compiled a report of prominent ESG investing data and found that since the downturn began ESG investments have outperformed the market.


Zacks found a similar result with their own research.


OUR COMMENTARY


Once again ESG investments have encountered a disruptive market scenario and have outperformed their peers. During this unprecendeted downturn 62% of ESG Large Cap Equity Funds have outperformed the market. Given the advanced knowledge ESG funds have about the operational impacts and supply chains of every company in the fund it isn't surprising that they are faring better during the downturn than other investments.


Another reason for ESG funds have faired better during the downturn is their well known underinvestment, or complete divestment, of the fossil fuel industry. While the current rout of fossil fuels is being caused by an ongoing pricing war, not the Covid-19 outbreak, the fact that it coencided with the outbreak has compounded losses for a lot of funds.


This current crisis has been a good litmus test for funds and companies to asses how prepared they are to handle calamitous levels of disruption to their daily operations. No business, ESG focused or not, is built to survive being shut down for an extended period of time. However, if this is what the market looks like during one pandemic imagine how much worse it could get if we don't continue to demand that companies take proactive steps to make the world a better place?


WHAT YOU CAN DO


  • Whether you are invested in ESG specific funds or not pay attention to the impact your holdings have on the world.

  • Asses how your financial decisions support or inhibit the change you want to make in the world. Where are you spending your money?



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