Interest in sustainable investing has been growing as climate-related policies creep up governments’ agendas, and there has been more demand for companies to improve their social and governance standards. But there has been a longstanding debate as to whether a focus on sustainability, which includes environmental, social and governance (ESG) factors, in investing comes at the expense of performance. However, funds that aim to, for example, help combat climate change, preserve the environment, and or promote corporate responsibility, have held up better than their conventional counterparts over the past three months – and analysts believe this trend is set to continue.
Wealth manager Charles Stanley examined the average performance of funds marketed as ethical, socially responsible and sustainable in the Investment Association (IA) UK All Companies and Global sectors. There are 34 Global and 22 UK All Companies sector funds that have a socially responsible investment (SRI) strategy, up from 11 and 19, respectively, 10 years ago. The performance average is calculated according to the number of funds available in each year.