New Study Finds Investors Think About ESG Differently Depending on Performance

The increase in demand for socially responsible investing has been documented in numerous studies in recent years. However, a new study found that ESG investing is very sensitive to economic stress and income shocks. When there is an economic shock, the demand for ESG investing decreases accordingly. This study explored investment demand for ESG just prior to and after the COVID pandemic.

The results found that during a suspected or actual downturn from an economic shock, such as the global pandemic, investors are more likely to be concerned about risks. Some investors may even perceive ESG as unsustainable or costly if they are primarily concerned about forfeiting their returns. However, demand for ESG investments remained relatively steady for institutions like pension funds.

Speaking with a qualified investment professional about your overall strategy and when it makes sense to alter it based on concerns regarding the bigger economy is valuable. Our knowledgeable team of financial professionals will help you decide when ESG investing makes sense and how to incorporate it into your overall strategy.