In the past there was a debate as to whether considering environmental, social and governance characteristics in security valuation and portfolio construction would help or hinder portfolio performance. Some investors were rightly concerned that bluntly excluding sectors might lead to a portfolio underperforming a benchmark. But, over time, real-world track records have demonstrated that, when effectively applied, bottom-up ESG analysis can in fact be a driver of attractive long-term investment performance. Importantly, this acceptance is converging with another trend: increased demand to understand the social and environmental impact of portfolios.
To read more of this piece by Jonathan Bailey, Head of Environmental, Social and Governance Investing at Neuberger Berman, click on the button below.
Date of publication: July 2018
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