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Responsible investment should improve and outperform the market, not become the market

With its popularity only set to increase, there is a real risk that box-ticking homogeneity takes over

Responsible investment should improve and outperform the market, not become the market
Photo: Getty Images

In recent years, the investment industry has undergone a fundamental change in the way it approaches responsible investment. What is needed now is true transparency and a recognition that environmental, social and governance-focused investments (ESG funds) are not a homogeneous product.

Only a few years ago, responsible investment was considered a niche activity, a European phenomenon. Some argued it undermined fiduciary duty. Many were convinced it inherently resulted in lower returns.

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