Responsible Investing: history, trends, and challenges

Abstract

Responsible Investing, however labeled, has evolved from screening portfolios on negative criteria to a new paradigm premised on the impact of environmental, social, and governance factors on investment performance. The argued materiality of ESG factors and their interconnectedness with the future profitability of a company represents a more holistic approach than traditional Responsible Investing and a meaningful departure from it. Though ESG approaches remain some distance from becoming mainstream within investment management, a convergence nonetheless is taking place between ESG issues and company analysis that reflects the recognition of expanded risks and opportunities for a company’s long term financial health. Incorporating a Responsible Investing component into an investment program is not a “one size fits all” approach, and many products and managers are entering the area. EAI is committed to identifying the most appropriate investment opportunities and managers with the greatest potential to meet broad ESG and specific client objectives.


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