Page 6 - Riverwater 2020 Sustainability Report
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2020 SUSTAINABILITY REPORT
SUSTAINABLE INVESTING IN 2020
Further evidence of outperformance by ESG companies in 2020 can be found in the 2021 Morgan Stanley Institute for Sustainable Investing study Sustainable Funds Outperform Peers during 2020 Coronavirus. The study analyzed more than 3,000 US mutual funds and ETFs and found that sustainable equity funds outperformed non-ESG peer funds by a median total return of 4.3 percent in 2020. Meanwhile, sustainable taxable bond funds over the same period outperformed their peers by a median total return of 0.9 percent. In 2019, both
sustainable equity funds and sustainable taxable bond f
peers.
unds also outperformed their traditional
ESG AND PERFORMANCE, HISTORICALLY
A growing body of academic evidence suggest that sustainable investments are actually likely to outperform their peers and the market. Two notable meta-studies analyzing thousands of independent studies confirmed these findings:
of over 2,000 academic studies published since 1970 demonstrate that prudent sustainability practices have a positive or neutral influence on investment performance2.
of studies show that company stock price performance is positively influenced by good sustainability practices. 4
YOU CAN DO WELL WHILE DOING GOOD
of study results found that companies with robust sustainability practices demonstrate better operational performance and cashflows.3
of cost of capital studies show that sound ESG standards lower the cost of capital of individual companies. 5
2 Gunnar Friede, Timo Busch & Alexander Bassen (2015) ESG and financial performance: aggregated evidence from more than 2000 empirical studies, Journal of Sustainable Finance & Investment, 5:4, 210-233, DOI. Available at:
https://www.tandfonline.com/doi/pdf/10.1080/20430795.2015.1118917
3 Clark, Gordon L. and Feiner, Andreas and Viehs, Michael, From the Stockholder to the Stakeholder: How Sustainability Can Drive Financial Outperformance (March 5, 2015). Available at: https://ssrn.com/abstract=2508281
4Ibid.
5 Ibid.
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