ESG investing Reasons to invest

Reasons to invest

Sustainable investments focus on generating long-term, risk-adjusted financial returns while having a positive ecological, social and ethical impact.

This being said, the present moment is auspicious for ESG investing:

  • A young generation of investors harbors a stronger-than-ever commitment to sustainability
  • New methodologies and analytics are allowing for even greater precision in implementation and portfolio construction
  • Studies (see chart) show that ESG-compatible investments achieve similar performance scores as comparable traditional portfolios
  • 90% of academic studies find positive or neutral relationship as review of 2,200 studies shows
  • Academic study published in 2015 reviewed 2,200 studies since beginning of 1970s
  • All studies had reviewed the relationship between ESG factors and corporate financial performance
  • Overall, 90% of studies reviewed indicated a nonnegative effect
  • The effect remained positive over time since 1970 

Source: Friede, Busch and Bassen, ESG and financial performance; aggregated evidence from more than 2,000 empirical studies. Journal of Sustainable Finance and Investment, 2015.

Historical performance indications and financial market scenarios are no reliable indicators of future performance.

Potential risks

  • The final return depends on the selected investment strategy
  • Sustainable investment strategies face the risk of higher tracking errors, differences in performance and investment strategy risk, particularly if the strategies are managed versus traditional benchmarks (non ESG compliant benchmarks)
  • For risks of individual investment instruments, please refer to your relationship manager