When the investing community moves in unison, it can be a powerful force for good.
I am impressed by the increasing number of fund managers that incorporate Environmental, Social and Governance (ESG) factors into their investment criteria. It makes sense, not least in helping reduce risk.
Figures from the US SIF Foundation show ESG assets rose by nearly 70% between 2019 and 2020 – to more than USD 8 trillion. In a survey of institutional investors, State Street Global Advisors found that four out of five now incorporate an ESG component with their investment strategies. More than two-thirds say it has beefed up their returns.
But many big investors have gone beyond this. Some 1,200 of the world’s largest investors have signed up to the United Nation’s principles for responsible investment, and large numbers now back the UN’s Sustainable Development Goals (SDGs). These were adopted in 2015 and target a world free of poverty by 2030.