There has been some backlash over ESG investing over the last few weeks, with critics voicing their opinions about the viability of ESG funds. There are no grounds for this criticism as companies with strong ESG practices compete better in terms of related tech innovation and regulation, and are more transparent in their everyday dealings. Not to mention that ESG funds often outperform their counterparts.
The climate change emergency continues escalating, as shown by the soaring northern hemisphere temperatures. Companies that follow ESG principles focus on sustainability and reducing their carbon footprint, along with effective risk management strategies to reverse the effects of global warming. They can also navigate potential disruptions caused by an environmental crisis by bolstering portfolio resilience and safeguarding clients’ financial interests.
The younger generation of investors are looking to align their values with their financial decisions and find companies that can effect meaningful change and produce favourable returns.