There’s been a lot written about pointing your portfolio in the same direction as your moral compass. Dubbed socially responsible investing (SRI), the portfolio strategy has caught fire with a variety of investors both big and small. By using various environmental, social and governance (ESG) screens, the idea is that you (or a professional) can craft a portfolio that supports your beliefs. You can simply feel good about what you’re investing in.
And now, investors can feel good about the returns.
A series of new studies have shown that ESG has not only caught up to traditional portfolios, but in many cases, they have surpassed them. Investors can now do good and make good money at the same time.
Rising Assets and Rising Returns
According to the U.S. Social Investment Forum (SIF) Foundation, investors have embraced ESG investing in a big way. As of the end of last year, assets invested across ESG strategies in the U.S. rose to $8.72 trillion. That’s a 33% increase since 2014. This equates to one-fifth of all investments under professional management in the nation. Globally, the number is closer to $23 trillion.
