Trends in social investing were the focus of a lively panel discussion at this year’s 2019 Early Stage Symposium sponsored by the Wisconsin Technology Council.  Michael Best was a proud Platinum Sponsor of this year’s event.

The framing question for this panel was – can investors “do well” by seeking to invest in companies that are “doing good?”  The clear answer from our panelists – Yes! – backed up what national trend data have shown for some time.  Here are just a few of the proof points.

The Morgan Stanley Institute for Sustainable Investing released a study earlier this year that analyzed the overall performance of sustainable funds as compared to traditional funds.  The study looked at funds that prioritize companies’ performance across a range of environmental, social and governance metrics – identified by the shorthand “ESG.”  The punchline:  funds tracking ESG metrics are growing, and are doing every bit as well as traditional funds.

  • Morgan Stanley identified 144% growth in the number of ESG funds from 2004 to 2018.
  • Sustainable or socially responsible funds performed as well as, or better than, traditional funds over this same time period.
  • These funds tolerated economic downturns better than traditional funds. Notably, during the market turbulence of 2008, 2009, 2015 and 2018, sustainable funds lost significantly less value than did traditional funds.

In a similar vein, the Forum for Sustainable and Responsible Investment (US SIF) has tabulated a three-fold increase in US assets under management using socially responsible strategies between 2012 and 2018, including a 38% increase in just two years from 2016 to 2018.  By US SIF’s count, socially responsible strategies are now applied to invest one of every four dollars of total US assets under professional management.

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