ESG isn’t a new concept. In recent years, it’s gained more attention and assets thanks partly to the proliferation of related ETFs.
However, there’s still a mountain to climb regarding better education for end users. They need to know about the potential benefits of this theme’s principles and the utility of related ETFs. If that objective is accomplished, it could broaden adoption of products. These include the Calvert US-Mid Cap Core Responsible Index ETF (CVMC), Calvert US Select Equity ETF (CVSE), Calvert Ultra-Short Investment Grade ETF (CVSB) and Calvert US Large-Cap Diversity, Equity and Inclusion Index ETF (CDEI).
In the third annual “Global ESG Monitor” survey, Global Strategy Group and SEC Newgate noted that nearly eight in 10 investors in the U.S. still aren’t aware of ESG. However, the study also found that many investors are using ESG metrics when making personal investing decisions. That could bode well for long-term adoption of related products, including the aforementioned Calvert ETFs.
Making the Case for More ESG ETF Adoption
For these ETF issuers, there are important findings in the Global Strategy Group and SEC Newgate survey. For example, 72% of those polled believe it’s important for companies to take action on ESG issues. And 60% said companies should be vocal on issues important to customers and employees.
“Since 2022, more Americans (3%) think it’s important for companies to take action on ESG issues,” according to the research firms. “Only 7% think that companies should not speak out on issues important to their customers and employees.”
Another area where CDEI, CVSB, CVSE, and CVMC could be appealing to investors is closing the ESG trust gap. This gap exists in large part due to greenwashing. Greenwashing is defined as companies making ESG claims while doing little or nothing supporting those claims. Should the trust gap close, broader embrace of ESG ETFs could follow.
“Even though Americans think it’s important for companies to take action on ESG issues, only four in 10 believe companies are currently behaving ethically and doing the right thing (40% agree), or that they are using their power and influence to create positive change (38% agree),” according to the survey. “This demonstrates a significant ‘Trust Gap’ between what Americans think that companies should be doing and perceptions of their actual behavior. The lower figures for the U.S. compared to international peers also suggest American companies aren’t cutting it in the eyes of their customers.”
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