Weekly Highlights March 31, 2015 Weekly Highlights March 31, 2015 Weekly Highlights March 31, 2015
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Wednesday, April 1, 2015 - 9:45am

So If The US Equities Market Cools Off -- What Happens With ESG Investing Strategies?

Michael Shagrin writing in Fundfire (a Financial Times service) poses the rhetorical question:  Will ESG investing strategies be set up for a fall "if the U.S. equity markets cool off"?  He examines the results of a recent survey by Commonfund that suggests that institutional investors may grow "suspicious" of ESG strategies in a downturn.

Just below half of survey respondents said they didn't expect that SRI criteria (such as ESG strategies) would be an important part of their investment policy over the next three years -- and 25 percent said that ESG would play a greater role in portfolio management at their firm. 

Why the "suspicion" or lack of interest? Could be a misperception that ESG strategies are "confining," and reduce a manager's ability to produce "top flight returns?"  On the other hand, ESG strategy proponents expect to sleep more soundly and have better returns than the "un-convinced," Shagrin reports.

Could be lack of understanding of ESG strategies that is back holding greater institutional investor acceptance of the approach?  Commonfund's president, Keith Luke, thinks that is part of the thinking behind responses to the survey.

G&A EVP and partner Louis Coppola adds his perspective: "In our experience, during market downturns (note: like 2008-2009), money flow to safety and we have seen evidence of faster recovery of companies with sustainability integrated into their strategies..."   Read the Top Story for an informative look (in the survey results and perspectives offered) at "ESG's Future..."

This is just a sample of some of the articles from this weeks SustainabilityHQ Highlights.  You can view the full Highlights by using the following links. Sustainability | ESG, Highlights for the Week of March 31, 2015