Are ESG hedge funds a good bet? According to the ESG Fund Index the answer is yes. The market for environmentally and socially responsible investing has multiplied over the past years as investors and companies have recognized the importance of corporate social responsibility.
Demand for Environmental, social and governance (ESG) has bloomed as a result and corporations have been making a conscious effort to reform to meet investors’ requirements. For example, during the first quarter of 2017 total green bond issuance stood at $21.8 billion, up nearly 42% year-on-year. For 2017 as a whole credit rating agency, Moody’s estimates companies will issue $120 billion in green bonds, eclipsing the record of $93.4 billion issued last year. Green bonds are linked in some way to climate change solutions and fund projects that have positive environmental or climate benefits.
According to research from financial research firm Eurekahedge, ESG investors are well rewarded for their efforts to encourage companies to be better corporate citizens.