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The Sustainability Impact of Popular Passive ESG Funds

New Research Finds Passive ESG Funds Have Growing Pains

Published 03-30-21

Submitted by Impact Cubed

LONDON, March 30, 2021 /CSRwire/ - Impact Cubed is pleased to publish its latest research on the performance of passive ESG funds.  The research builds on its award-winning approach to measuring impact. 

The rapid growth in passive ESG funds is an exciting development for investors, who can now pick and choose among a wider array of lower cost funds marketed as ESG.  Passive ESG funds are designed to avoid ESG risk, but do they have positive impact? 

Impact Cubed turned its model onto some popular passive ESG funds to peel back the marketing and look under the hood.  Top findings include:

  • Some passive ESG funds actually have an overall negative impact. 
  • ESG performance varies four-fold between the ‘best’ and ‘worst’.  
  • Smart investors who know what to look for can find a passive ESG fund with positive impact and lower tracking error. 

Many passive funds still have ESG growing pains and will need to measure impact if they are to improve and attract investor interest. 

Larry Abele, CIO of Impact Cubed and report co-author, advises “As ESG investing becomes more mainstream, passive ESG fund managers who want to secure a proper perch in the pecking order for capital allocation will need to be more transparent about the impact provided by their approach.” 

For a full copy of the research, The Sustainability Impact of Popular Passive ESG Funds, please visit https://www.impact-cubed.com/NewsAndPublications

For more information, visit www.impact-cubed.com

About Impact Cubed:  Impact Cubed provides analytics and investment solutions for building more sustainable portfolios with greater impact. It combines an award-winning approach to integrating impact into risk and return with technology-enhanced portfolio design and management. The outcome is a seamless approach to customized sustainable investing.

Download the attached file(s): Impact_Cubed_Impact_of_Passive_ESG_Funds_15March_2021.pdf

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Impact Cubed

Impact Cubed

Impact Cubed provides analytics and investment solutions for building more sustainable portfolios with greater impact. It combines an award-winning approach to integrating impact into risk and return with technology-enhanced portfolio design and management. The outcome is a seamless approach to customized sustainable investing.

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