COMPRESSED MATTER: #1 – ESG: Also less volatile and risky
Flows into non-ESG funds are often buffeted uncomfortably by global sentiment. ESG funds, in contrast, seem to have a steely resilience.
Source: Edison Group analysis of Morningstar direct data
in fact, the ESG juggernaut has now reached such speeds that a stock’s rating risks being affected if it doesn’t address the issue.
When Edison reader @Julian Macedo, CEO of The Deal Team, read his December pension statement it informed him that 40% of the allocation would now include tilts and exclusions based on ESG criteria. This strongly suggests that not addressing ESG is a risk to a stock’s relative value. As Julian argues: if 40% of your customers wanted a new feature, you’d create it.
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