Although the novel Coronavirus COVID-19 (which I'm sure your sick of hearing about by now) is a terrible disaster happening to our society, it is already teaching us lessons. If we heed these lessons, we can plan for a brighter, healthier, more sustainable future.
In terms of economics, sustainable stocks and funds have been a gamble for traditional investors for a long time. Now, with COVID-19 stirring things up, markets are extremely volatile and many gains have been lost altogether, yet there's one area doing significantly better than the rest of the market. ESG stands for Environmental, Social, and Governance funds, which encapsulate much of the sustainable market.
A recent Bloomberg analysis showed that ESG assets are doing twice as well as more traditional stocks, including tech companies and especially fossil fuel-heavy funds. A separate study by Morningstar also showed sustainable stocks outperforming competitors by far, even in light of the coronavirus upheaval.
These insights, coupled with advice from longtime economic advisors and fund managers, are beginning to show investors that sustainability is truly the only reliable way forward economically.
Unfortunately in the path to get there, there are some bumps in the road. In the United States and other European and Asian countries, portfolio managers can apply the ESG labels indiscriminately, making truly sustainable investing confusing to new investors, and even seasoned ones. Many accuse these managers of greenwashing to make funds look more sustainable than they are, posing a threat to true sustainable investing, as people can't be sure if they can trust their fund to be truly sustainable.
If you want to start impact investing in truly sustainable ways right from an app on your phone, trust Newday to have your back. It's the casual investing app I use for social good, certified B corporation, and backed by tons of reputable companies. Interested in even more complicated sustainable investing? Robinhood is another less-casual investing app I also use, but it requires more research and upfront knowledge.
Let me know of any related stories or other good places you can sustainably invest in the comments!