Saturday 22nd October 2016                 Change text size:

Good Money Week: socially responsible investing’s poor performance myth – gets skewered

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Yesterday we set out the reasons why investors and advisers should doubt the pervasive poor performance myth for SRI. The hard data you need to puncture this myth are in the recently published Guide to Sustainable Investment, but here’s a few canaries in the (literal) coal mine of unsustainable investing.

February 2015: The Global Sustainable Investment Alliance, reports that between 2012 and 2014 the global sustainable investment market grew by 61%, according to a new report. Last year the market saw $21.4 trillion (£13.8tn) in assets invested sustainably, compared to $13.3 trillion (£8.5tn) in 2012.

September 2015: Analysis by Independent SRI Consultant John Fleetwood of 3D Investing indicates that;

– Across UK All Companies: the SRI fund basket has average outperformance of 9.58% over the last 5 years. 11 of 15 SRI UK equity funds outperformed sector average over last 5 years. Average SRI fund outperformed in 3 of last 5 years.

– Across Sterling Corporate Bonds: 5 of 7 SRI funds outperform over 5 years. The average outperformance over 5 years is 3.11%, which is significant for bond funds. SRI funds outperform in 4 out of the 5 year periods.

– And globally, SRI global funds outperformed in 3 of 5 year periods. Over 5 years they outperformed marginally and 7 of 11 funds performed better than global average over 5 years

Fleetwood said: “These are quite remarkable figures.  It’s tremendously encouraging to see that long term outperformance is being replicated across different sectors and asset classes. “

October 2015: BlackRock – the world’s largest asset manager and no misty-eyed environmentalist – launches the BlackRock Strategic Funds Impact World Equity Fund, to deliver “measurable social and environmental outcomes while generating competitive financial returns.”

October: EIRIS estimates £15bn invested in green and ethical UK funds in advance of Good Money Week up from £6bn ten years ago.

October 2015: Blue & Green launches its Guide to Sustainable Investment.

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