More and more investors are targeting companies that promote sustainability, on issues such as climate change, energy efficiency, environmental protection or corporate governance, on the principle that “this must be done, from a moral point of view”. However, the performance of “sustainable” funds is comparable to that of conventional equity funds, the International Monetary Fund (IMF) has shown, in the October 2019 Global Financial Stability Report.

Research suggests that investors do not necessarily have to give up returns when investing in portfolios that prioritize environmental, energy efficiency, social and governance (ESG) values.

The IMF estimates that there are currently more than 1,500 investment funds with an “explicit sustainability mandate”, with assets of nearly $600 billion, rising from about $200 billion in 2010. Generally, ESG listed funds still have steps to go before they become mainstream, accounting for less than 2% of the total universe of investment funds, according to CNBC, quoted by financialintelligence.ro

The IMF’s research also detailed a change in “responsible investment strategies”. In 2012, for example, investors made sustainable investments mainly by excluding from their portfolios companies or sectors such as tobacco or gambling. Now, investors are allocating more and more money to companies with good results on environmental, energy efficiency or social issues.