The summer of 2020 will not be remembered for European vacations, outdoor concerts or theatre, nor the bliss of knowing your children were off at camp enjoying much needed time away from streaming video and closer to streams of water. Instead, this summer we have collectively had to adapt to new routines, change our habits, and carry around at least one new accessory: the face mask.

Throughout this period of great uncertainty, we have seen the steady march of global equity markets back to their pre-pandemic highs despite the continued widespread economic and humanitarian devastation that we have experienced to varying degrees. We have over the same time, learned more about the progression of the virus, therapeutics that can work to lower mortality and bought time to research and verify additional treatments and potential medications.

Another lesson from 2020 thus far has been the validation for responsible investing on numerous fronts. Investment performance, relative to what is general considered the traditional portfolio or index, has shown itself to deliver a superior risk-adjusted return throughout an admittedly short (but burned in our recent memory) period. From my perspective, the momentum that responsible investing has gathered over the past six months is much like the accelerated adoption of all things digital. Who would have thoughts that in the span of months, digitization and responsible investment would enter the mainstream?

How was this investment performance accomplished? Through the drawdown in global markets, responsible portfolios generally ‘lost less’ of their value, and therefore were better positioned to participate in the ensuing rally. As well, because responsible portfolios generally under represent energy and fossil-fuel related stocks, the collapse in the price of crude and associated commodity prices was a risk avoided. Employing the ESG (environmental, social, governance) framework in analyzing securities also bore fruit, as the companies that passed muster were typically the ones best equipped to adapt to changing consumer habits, invest in the needs a safer work environment called for, and have in place the governance structure that inspires what investors need most during uncertainty: confidence.

Witnessing the drop in emissions and the improvement of our environment (reduction in smog/particulate measures, clearer streams and rivers, return of wildlife to some areas), albeit fleeting, as well as an anticipated government-led move to stimulate the global economies with sustainable infrastructure may be factors in the rise in interest in responsible investments. It may also have something to do with the social issues the pandemic exposed in terms of worker safety, community engagement, and the importance of good governance. Recent headlines about the unchecked rise in Arctic temperatures and what that has meant for both a rapidly disappearing Canadian ice shelf and Russia’s vast peat bog fires have also prompted an interest in decarbonizing portfolios. Whatever the reason, the common thread is the openness to challenge the status quo of investing by incorporating the ESG framework, as well as affect positive change through a conscious shift in how your investment capital is allocated.

As summer nights begin to cool, our planet continues to warm unabated. We have seen with that with the global pandemic, the routine of our daily lives has changed drastically, barely recognizable from summers past. In a way, it is an indication of how our lives will also be affected by climate change should we not take action now. One of the ways to do so, and tap into the vast opportunity it represents, is to embrace the framework of ESG and responsible investing.