Environmental, social and governance (ESG) investing is all the rage. When Dana Investments started our first ESG fund at the turn of the century, the total market size for ESG strategies was only $2 trillion. At the start of 2018, ESG strategies accounted for an astounding $12 trillion in investable assets! However, despite this robust demand, an air of ambiguity still hovers over the ESG marketplace. Investors are hearing about these funds and clearly want to know more.
ESG, SRI (socially responsible investing), RI (responsible investing) and faith-based funds all fall under the umbrella of impact investments. The mandate for these funds is to consider the impact that corporate behavior has on shareholders, stakeholders and society. Impact investors not only want their returns, they want their returns to matter.