The coronavirus pandemic and devastating forest fires has sparked an uptick in demand for Environmental, Social and Governance (ESG) investment strategies, which will accelerate the commercial adoption of more sustainable clean technologies.
The trend toward sustainable investing was already underway prior to the pandemic. According to a report from Morningstar, U.S. assets in sustainable index funds have quadrupled since 2017 and now account for 20% of the total. Analysts have provided a multitude of reasons, from the adoption of the UN’s Sustainable Development Goals by asset managers to the generational wealth transfer from baby boomers to millennial and Gen X.
What surprised many investors, however, is that ESG funds performed well relative to non-ESG funds during the market correction in mid-March. Fidelity reported that stocks with a better ESG rating still fell between February 19 and March 26, but outperformed the benchmark.
Read the rest of Clear Blue CEO Miriam Tuerk's latest Forbes blog post.