Here’s What ESG Investors Want to See From Companies During a Crisis:
Investors who follow ESG (environmental, social and governance) criteria are looking closely to see how companies have responded to employees, customers, and other stakeholders during the crisis.
This is the latest development in the flood of interest in ESG, despite the bear market. Sustainable stocks and funds have outperformed during the recent selloff, partly because they were less exposed to energy, but also because ESG funds are perceived to have superior risk management.
Based on first quarter returns, sustainable funds were much more likely to appear in the top quartile or top half of their peer group in terms of performance than conventional funds, according to Morningstar.
And at Finsphere ESG, our flagship algo has outperformed the benchmark by 12.53% year to date.
ESG investing passes its first test in a falling market!
For months, the ESG cynics have warned that sustainability strategies would get tested in a downturn. Well, here we are.
Take, for example, the MSCI Europe ESG Leaders index: by Thursday morning this had outperformed the EU benchmark by 180 basis points since the beginning of the year. MSCI’s Japan and US Leaders indices have outperformed by 50bp.