Outperforming by 50%? These numbers are too big to ignore

Jul 26, 2018 | Dan Rudisuela


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Morningstar's Sustainable Funds Landscape report published this year shows that managers whose investment process incorporates sustainability outperformed their Morningstar category by well over 50% in 2015-2017.

The focus article in this month's Global Insight publication (available here) is titled "The ESG Investing Advantage" and makes a very strong case for incorporating Environmental, Social and Governance factors into investment selection. To quote directly from the article:

If a company ignores these factors and, for example, seeks to increase profits at any cost (e.g., abusing employees or significantly polluting the environment), at some point the company - and shareholders - will bear the brunt of reputational damage, fines, sanctions, or potentially criminal charges.

Companies that are run well tend to perform well over the long term and also tend to run less of a risk of an expensive crisis as a result of doing the wrong things. More and more research is being done now to study the performance of responsible investing and the results are overwhelmingly positive.

How to incorporate responsible investing is a discussion I am having frequently and it is a trend that I see growing, to everyone's benefit, into the future. To speak one-on-one about what a responsible portfolio might look like, please feel free to reach out to me directly here.