In the past, SRI and ESG investing were viewed as
compromising performance, Voorhes says. Today, it is quite the opposite:
Socially responsible corporations are viewed as having solid long-term
strategies that can deliver returns on-par or even higher than companies that
do not employ these principles, she says. For example, the Brown Advisory
Sustainable Growth Fund invests in companies whose environmental strategies are
generating tangible business results, in the form of revenue growth, cost improvement
or enhanced franchise value, says David Powell, co-portfolio manager of the
fund, in Baltimore.
In fact, this is precisely why Voya Investment Management
employs ESG screens for all of its investments, says Drew Schechtman, vice
president and ESG integration leader at the firm, in New York City. In the past
three years, inquiries about ESG investing among Voya’s clients, which include
retirement plan sponsors, has increased 300%, he says.
For all of these reasons, advisers may want to understand
the ESG offerings and be prepared to explain IB 2015-01 to plan sponsors and
investment committee members who are interested, or are seeing indications of
participant interest, in such investment offerings.
- Assets in socially responsible investments have grown 33%
between 2013 and 2016, to $8.72 trillion.
- Millennials and Generation X are twice as interested as
the general population in environmental, social and governance investing.
- Natixis is the first investment management firm to launch
ESG-oriented target-date funds.