MAYBE weary of its role as a punchbag for moralists, and certainly in search of products with widespread appeal, Wall Street has taken to selling products linked to virtue. That is not easy: how does an industry focused on financial returns go about gauging goodness?
The approach started years ago with funds that called themselves “socially responsible”. More recently the terminology has evolved, with many claiming to pursue “ESG” investing, standing for “environmental”, “social” and “governance”.
Morningstar, a data-tracking firm, places any fund that uses terms such as sustainable investing, ESG and so on in its prospectus into a category that now has 204 members with $77bn in collective assets. The oldest fund in the Morningstar group dates back to 1971. But nearly half have been launched in the past three years. More quietly, the wealth-management offices of many American investment firms constantly roll out investments touting these sorts of...Continue reading
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