The Rise of ESG

by on Sep 21, 2018


Morgan Stanley recently announced that it amassed more than $20 billion in ESG assets over the past five years—more than doubling its impact investment asset goal for this period. The firm launched its Institute for Sustainable Investing platform in 2013, committing to the $10 billion dollar goal upon its inception. The firm launched two ESG-related programs in the past 12 months, and financial professionals posited this continued commitment to impact investing proved integral to the success of the initiative.

This marks just one quantifiable example of the traction responsible investing has gained since the beginning of its transition into the mainstream market in the 1960s. Another example can be found in the Forum for Sustainable and Responsible Investment’s 2016 report, which stated that about one out of every five dollars under management in the U.S. employed a sustainable investment strategy.

Even outside of the realm of numbers and statistics, investors reinforce their belief in the importance of ESG investing. In this Nielsen commentary, SVP of Investor Relations Sara Gubins described the increased importance of ESG factors in investors’ calculations of businesses’ long-term success. Her comments illustrate how a company’s operational practices and ideals are becoming just as important to investors as the bottom line.

Firms in the Asset Management Monitor – Investor coverage area have also shown dedication to marketing themselves as notable players in the field and developing their ESG investment offerings. For example, American Century’s Prosper with Purpose campaign donates 40% of annual dividends to genetically-based disease research and offers a dedicated Impact Investing page which houses articles, a video and graphs explaining the rising popularity of impact investing as well as basic information about approaches and investor interest.

To further exemplify the point, on its company site, Calvert asserts itself as a leader in the field and stresses to investors its dedication to sustainable investing, coining the term, “Responsible Investing is all we do.” The firm highlights its Four Pillars of Responsible Investing: Performance, Research, Engagement and Impact.

OppenheimerFunds has also made moves into the sustainable investing space. The firm created an ESG working group that has a presence in every area of the firm, in addition to becoming a UN Principles for Responsible Investment signatory in 2017.

As the world of responsible investing maintains its upward trajectory, Corporate Insight will continue to monitor the progress and impact of ESG factors’ prevalence in the asset management space.