Who would not want to invest in companies that are helping to move our environmental and societal sustainability forward in a positive way? They get the benefits of good proxy voting and shareholder engagement at an attractive price. It’s a very good value proposition and I think advisors are embracing it.
I want to be clear that this means there is opportunity to move active ESG management forward. Having a large cohort of companies to choose from makes it clear that there is a large spread between companies at the upper and lower ends of that scale.
In addition to moving indexing forward this is a tremendous opportunity to grow active ESG management. Companies that do this very well offer superior investment opportunities. I think this continues to move along with mainstream investing, with strong, research-based ESG performance becoming even more exciting.
Paul Ellis founded Paul Ellis Consulting to work with financial advisors who want to integrate sustainable and impact investment strategies for their clients.