When social conscience meets investor appetite

Investors’ main objective is profit maximisation. But, increasingly, they also expect their investment to have a beneficial impact on the environment. There is no greater return on investment than a healthy planet. 

To document this, investments in Environmental, Social, and Governance (ESG) registered an increase of 15 per cent during the first half of 2019, after growing just one per cent through 2018. Despite being a relatively small fraction compared to the total money market sector, the expansion is staggering as investors are now exploring more ESG options.

Millennial investors are speaking with their wallets and have an active interest in the social and environmental decisions their money funds on both a governmental and corporate level. ESG investing is now moving into the mainstream and developing from negative screening of sinful industries to more quantitative, data-driven and index approaches as the availability and quality of ESG metrics and reporting have increased.

Geographically, Europe was at the forefront of ESG investing and regulations, while the US caught up by greater transparency and disclosure and adopted more quantitative and commercial approaches that...