by Hank Boerner – Chair & Chief Strategist – G&A Institute
As the global coronavirus pandemic continues to uproot our normal business, financial, economic and personal pursuits, questions that we could logically ask are…
(1) what impact does the virus crisis have on the ongoing corporate sustainability / ESG / citizenship efforts; and
(2) what is the investor reaction – does the move into more sustainable / ESG investment vehicles continue?
Some answers come from Sanghamitra Saha, of Zack’s, writing in Yahoo Finance – “Here’s Why ESG ETFs Are Hot Amid Pandemic”.
He begins by explaining that ESG investing has remained “hot” since the pre-outbreak period, and as Wall Street recorded its worst quarter overall since Q 2008, ESG ETFs appeared [somewhat] resilient to acute selloffs in Q1 2020. (Read, he says: “ESG ETFs Appear Unscathed by the Coronavirus Carnage”.)
These investment vehicles had US$8 billion-plus inflow in 2019, four times their total 2018 inflow. In the first three months of 2020 the flow into ESG Exchange Traded Funds was $6.7 billion — pushing total assets in such funds to $19 billion (only a bit less than the total in February 2018).
Several of these ETFs outperformed the S&P 500® and came close to the Nasdaq performance (which has been the hot place for returns in 2020, bouncing close to the 9000 mark as we write this).
What are some of the reasons for such outperformance even during the virus crisis?
The author shares perspectives from Morningstar and Bloomberg, and presents data on performance on some of the ETFs offered by Nuveen, State Street SPDRs, Vanguard, and iShares MSCI.
We’ve been seeing news and commentary about this trend since the start of the virus crisis as investors seek out what they consider to be more resilient, “safer” companies as packaged in the respective ESG ETFs. What are public company managements doing to be part of this trend?
Mary Mazzoni, Senior Editor of Triple Pundit and Managing Editor of CR Magazine, shares news from the corporate sector in “Sustainability Isn’t Stopping: Just Ask These Companies.”
The firms and the stories of their continuing sustainability journeys that she profiles include Bayer and Microsoft.
She begins by addressing the comments of business columnist John D. Stoll in The Wall Street Journal…that “several top companies are starting to put the brakes on their ESG programs due to economic strain…”
Pushing back in TriplePundit: “Right now we’re all understandably consumed with the human suffering and economic strain posed by the pandemic…but we’re not convinced we’ll see a sunsetting of sustainability – and the eight corporate examples are just some of the reasons why…”
The two Top Stories present the two answers to the questions posed up top. And throughout the collection in this week’s newsletter you’ll see other answers presented in slightly different form.
The good news from the G&A Institute offices is that our corporate clients continue with vigor and strong commitment on their respective sustainability journeys, even as operations are disrupted by the virus crisis.
Managers tell us that questions from their investors about sustainability, ESG and related issues continue to increase, and major customers continue to ask questions related to their own supply chain management.
2020 is a challenging year – and sustainable, resilient companies are stepping up to meet the challenges, setting a welcome pace.
Here’s Why ESG ETFs Are Hot Amid Pandemic
Source: Yahoo Finance – Environmental, social and governance (“ESG”) investing has remained a hot favorite among investors since the pre-outbreak period. Wall Street recorded the worst quarter to start 2020 since the fourth quarter of 2008. But ESG ETFs appeared somewhat resilient to acute selloffs in Q1 (read: ESG ETFs Appear Unscathed by the Coronavirus Carnage).
Sustainability Isn’t Stopping: Just Ask These Companies
Source: Triple Pundit – Over the weekend, a sustainability-focused Wall Street Journal article started making the rounds on social media. In it, business columnist John D. Stoll notes that several top companies are starting to pump the brakes on their…
And here’s some additional perspectives on the two questions to mull over:
Seven Ways To Make Business Truly Sustainable Post-COVID
Source: Forbes – We humans are a spectacularly resilient species. Wars, famines, plagues, economic crashes – we dust ourselves off and press on. So we will get beyond COVID-19. But is it too much to hope that, devastating as the virus’s effects…
Can companies still afford to care about sustainability?
Source: FT – Note — Please use the sharing tools found via the share button at the top or side of articles. Copying articles to share with others is a breach of FT.com T&Cs and Copyright Policy….