Rush to Judgment on ESG ETFs Could Create Opportunities

ESG ETF’s (Could) Create Opportunities

The number of global ESG assets is anticipated to exceed $53 trillion by 2025, accounting for over a third of the projected $140.5 trillion in total assets managed. A perfect storm is building in the United States, EU, and China as a result of the pandemic and the green recovery, which will reveal how ESG is evolving.

New York, NY: Environmental, social, and governance (ESG) investing isn’t a new concept, but the fact that it gained broader acceptance and traction in recent years combined with the proliferation of related exchange traded funds, it’s being given a new treatment. With that comes plenty of criticism. Investors willing to look for the forest through the trees may find opportunities with ETFs, such as with the Goldman Sachs Funds, even as critiques of ESG strategies mount.

Earlier this week, NYU finance professor Aswath Damodaran called ESG a “mistake,” while Tariq Fancy, the former chief investment officer for sustainable investing at BlackRock, recently bashed the concept. However, plenty of ESG funds are allaying investors’ concerns about performance and risk, and some market observers believe that the critics are missing the mark.

JUST tracks the the JUST U.S. Large Cap Diversified Index, which goes beyond simple ESG metrics. Rather, the benchmark uses 88 filters to screen the Russell 1000 on “a variety of issues, including worker treatment, customer concerns and environmental impacts,” according to Goldman Sachs.

“The reality is that ESG products and research are more focused and targeted than that–with specific ratings, research, and approaches for the motivations of risk, impact, and values. ESG ratings firms are aiming to provide better, more comparable data and signals to support the analysis of factors that previously were challenging for investors to analyze,” according to MacMahon.

It pays to remember that the ESG movement is just getting started and, specific to JUST, the fund which is allaying concerns about performance as it is higher by nearly 32% over the past 12 months. Just one of the companies which are focussed on investments which are sustainable.

The JUST U.S. Large Cap Diversified Index is a large, diversified index of United States stocks provided by JUST Capital . The companies included in this index are sampled from two major indices, MSCI USA IMI Liquid Balanced and MSCI USA IMI . It is rebalanced at semi-annual periods in March and September.
The index is meant to be a benchmark of the most liquid and investable large cap US-domiciled companies from an ethical perspective rooted in public opinion, as opposed to only capitalistic principles. As such, it eliminates all companies that have been identified as having poor business practices by JUST Capital.
A man riding the green up arrow ahead of a red down arrow signifying the increasing investment in ESG related funds

Goldman Sachs is an American multinational investment bank and financial services company headquartered in New York City. The firm also holds the distinction of being one of America’s most prestigious banks, as well as having done some of the most notable deals on Wall Street.

Goldman Sachs has proven to be a controversial institution within America before – most notably their involvement in the 2007 – 2009 financial crisis, when many accused them of using unethical practices to make loads of money while harming other companies and nearly bringing down the whole world economy.

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ESG: The New Way of Doing Business in New York, NY

Business and organizational sustainability is a complex issue in New York, with many stakeholders and perspectives. It’s also an area where the stakes are high – if we don’t get it right, there will be dire consequences for our communities and the planet.

The good news is that more investors are taking notice of ESG issues when they invest in New York companies and organizations. In fact, over the past decade institutional investors have been increasingly incorporating Environmental, Social and Governance factors into their investment decisions. And soon it will be impossible to win any RFP’s without it.

We want everyone (not just big institutions in New York) to be able to incorporate ESG-related risk into their actions because Companies that don’t adapt to these changes will not survive. This change has many companies in New York scrambling to figure out how they can stay competitive and be profitable while also contributing to a better future.

ESG The Report (Holistic Approach) is one solution that helps businesses in New York find their niche in this new landscape by providing information on risks and opportunities related to environmental, social and governance factors affecting them today. Our report offers insights into what investors are looking for from companies in New York and around the globe. Ask about our ESG Frameworks package to help you get started on making your company, department or organization diverse, equitable and inclusive for all stakeholders.

ESG Frameworks provide investors with insight into how companies are performing in terms of corporate governance, (non-corporate entities governance issues) social issues, labour standards and environmental impact. Ask about our ESG Frameworks package to help you get started on making your company, department or organization diverse, equitable and inclusive for all stakeholders.