One constant throughout 2020’s parade of pandemonium is that investing in companies with high environmental, social and governance scores has been relentlessly gaining momentum. Historically, Ethical or ESG investing has been sidelined during trying economic times, largely for fear that it would tamp down returns. But recent data has shown quite the opposite. ESG funds are outperforming the overall market.

In a June 2020 overview GreenBizz gathered relevant statistics to global ESG performance and growth:

• Research by S & P Global Market Intelligence found that funds investing in companies based on their ESG ratings are “relative safe havens in the economic downturn.” It analyzed the by performance of 17 ESG-focused exchange-traded and mutual funds with more than $250 million in assets from Jan. 1 through May 15 [2020]. All but three outperformed the S&P 500, widely considered one of the best representations of the overall U.S. stock market.

• High-net-worth investors are flocking to ESG investment vehicles for their positive social and environmental impacts, though financial performance is the main driver, according to Nuveen’s Fifth Annual Responsible Investing Survey. For the first time in the survey’s history, a majority of investors (53 percent) cited better performance in choosing ESG investments, seemingly shunting aside the misconception that investing responsibly means sacrificing returns.
• It’s not just short-term returns. Morningstar also examined the long-term performance of 745 European-domiciled ESG funds and found that they outperformed non-ESG funds over one, three, five and 10 years.

So, money is pouring into ESG investments largely because they produce higher short and long-term yields and are seen as less risky during turbulent times. Almost a no-brainer.