Uncategorised
Performance is the guiding star in ethical investing, says Cerulli
Asset managers are having to bow to the growing pressure for socially responsible investment, but where principles and strong fund performance clash the latter will usually prevail, according to Cerulli Associates.
The latest issue of the Cerulli Edge-European Monthly Product
Trends Edition paints a picture of 'best practice' giving way to
expediency. In it, the Boston-based analytics firm says that
environmental, social, and governance (ESG) criteria, unlike
outright ethical considerations, are more concerned with
making systematic, quantifiable assessments of the financial
consequences of an investment than judgements about what is
morally "good" or "bad". ESG encompasses issues such as
whether companies have sustainable business models or whether
their performance could suffer because they do not have the
right mixture of people in their boardrooms.
"ESG has become a 'hygiene' factor - no-one notices when it's done right, only when it goes wrong and funds are found to be investing in the 'unacceptable'," said a Cerulli analyst.
