“In the early years, socially conscious investing was an amalgamation of a few different practices. Often it was negative screening of things people didn’t want to own paired with some form of active management that was not particularly connected to that,” Goldstein says. “What has unfolded with ESG here is a much greater clarity of conception and sharpness of execution around distinct disciplines.”
The New York State pension fund's commitment to ESG, for example, is an “index-like approach—getting an efficient exposure in a risk-managed way,” but with a commitment to reducing carbon footprints, he says.
Goldstein describes the approach as “getting the beta you want” along with the values you want.
Asked how one can judge this style, Goldstein says he will compare ESG performance “to the same peers and the same market benchmarks as any other things.”