Environmental, Social, Governance investing has been growing steadily in recent years but has taken on the spotlight as the world rebounds from the impacts of COVID’s economic shutdown. ESG stock fell at a slower rate to traditional portfolios and have seen more resilience in recent months.
By investing in ESG-stock, we are investing in good business practices, which will ultimately help to shape our future.
Sustainable investing has been mounting in popularity for years. This new investment strategy took a radical leap forward this year with CEO of Blackrock, Larry Fink’s announcement that the $6.47tn asset manager’s “conviction is that sustainability- and climate-integrated portfolios can provide better risk-adjusted returns to investors”, and that the Blackrock fund managers would be conscious of businesses’ environmental and social responsibility going forward. Months later, this assertion was put to the test.
Though the pandemic was reported on haphazardly earlier this year, Larry Fink’s address made no mention of COVID-19. This pandemic, however, has been a perfect test of the strength of ESG stock portfolios. Over the course of the past months in quarantine, economic decline, political and trade instability, ESG-consideration stock have proven more robust than their non-ESG competitors.