“This demand looks poised to accelerate amid societal and demographic changes and greater investment conviction,” said BlackRock. “There’s growing awareness among investors that certain factors—often characterized as environmental, social and governance, or ESG—can be tied to a company’s long-term growth potential. Also contributing to this backdrop: Increased regulation and government focus; for instance, as the impact of climate change becomes more noticeable.”
A key point in driving more interest in sustainable investing strategies is the ability of the related products to deliver similar or superior returns to funds that are not ESG or SRI focused.
“We find ESG has much in common with existing quality metrics such as strong balance sheets, suggesting ESG-friendly portfolios could be more resilient in downturns. These resilience properties deserve attention as market uncertainty increases. In other words: We have arrived at a ‘why not’ moment in sustainable investing,” according to BlackRock.
For more on core investing strategies, please visit our Core ETFs Channel.