Investing With Your Heart Could Be Good For Your Pocket Book

Perhaps one of the most powerful secular trends we’ve seen in recent years has been a shift toward companies and stocks that give investors access to positive environmental, social, and governance (ESG) values.

Various ESG mandates at certain institutional investing organizations have led to a surge of capital inflows into sectors such as renewable energy, technology, and companies confused on improving social good in addition to growing shareholder value.

Investing in companies that support positive environmental, social, and governance objective is not only the right thing to do. New studies have shown investments in such companies have greatly outpaced carious benchmark indices in recent years, a divergence from the past where shareholder value was the primary, and on most cases the only concern for institutional investors.

Achieving one’s economic goals while contributing to a greener, more equitable future is a win-win most investors like.

Dirty sectors such as oil and gas have unsurprisingly seen a significant amount of capital outflow in a similar way (capital needs to flow from somewhere).

Depressed commodity prices have further inhibited investment in this sector, and a long-term supply/demand in balance is expected to continue for some time.

Given this landscape is unlikely to change, I would highly recommend investors pay close attention to how investments in their portfolios are aligned or misaligned, with a future that is likely to be more ESG-oriented than ever.

Invest wisely, my friends.