https://blogs.cfainstitute.org/investor/2019/09/03/esg-investing-can-you-have-your-cake-and-eat-it-too/
The ongoing debate about environmental, social, and governance (ESG) investing sometimes feels like a rehash of that age-old rhetorical question.
Proponents of ESG data believe it can help investors better understand the risks and opportunities companies face and may even offer alpha generation potential. On the other hand, skeptics think ESG criteria limit the universe of available stocks and that such restrictions are bound to negatively impact returns.
To return to our metaphor, having the ESG cake means generating strong investment performance, while eating it too implies doing good from an ESG perspective.
So which is it? Can investors have it all?
Christopher K. Merker, PhD, CFA, is a director with Private Asset Management at Robert W. Baird & Co. and executive-in-residence and co-director of the Marquette S-Lab. He is also founder and chair of the board of Water + Energy Forward, a green bank focused on market-based climate solutions. He holds a PhD in investment governance and fiduciary effectiveness from Marquette University, where he has taught “Sustainable Finance” since 2009. He publishes
Sustainable Finance and is co-author of
The Trustee Governance Guide: The Five Imperatives of 21st Century Investing.
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