We believe that it is incredibly important to separate facts and opinions on ESG investing. As part of our firm’s research on ESG, we offer clients perspective on what ESG strategies have delivered historically. It is critical to recognize that the money is the client’s not the manager’s, and that the spectrum of client demand is much more nuanced than the debate seems to acknowledge. Managers should also be completely transparent with their clients about how ESG factors are impacting their judgments on both individual companies and on portfolio construction in aggregate.
It is in every investor’s interest to encourage investee companies to publish more hard data on their performance on the different ESG criteria; more data allows us all to make more informed choices. Increased client appetite for ESG investing is not a blip but rather a secular shift that will continue to grow on a global basis. As it matures, increased ESG demand will develop more nuances along the way. For both clients and managers, it’s important to base ESG’s growth on secure foundations, so that clients with different beliefs and needs can have those needs properly met.