The Only Way is ESG

Sustainable investing has moved into the mainstream in recent years. Eventually everyone will be an ESG investor, says Morningstar columnist John Rekenthaler

John Rekenthaler 2 June, 2020 | 1:54PM

ESG

Once upon a time, there was socially conscious investing. This was primarily punitive, meaning that rather than rewarding companies for being good, it disqualified them for behaving badly.

It seemed that socially conscious investing directly refuted the prevailing investment doctrine of shareholder value, which stipulated that firms should care first, foremost, and perhaps even solely about creating value for their investors, by finding ways to increase their stock prices and/or dividends. Instead, for socially conscious buyers, a company’s first task was to be ethically acceptable.

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About Author

John Rekenthaler

John Rekenthaler  John Rekenthaler is vice president of research for Morningstar.

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