Covid-19 highlights need for stricter ESG oversight

Author: John Crabb | Published: 17 Apr 2020

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The rise in financial instruments marketed under the moniker of ESG [environmental, social and governance] as a direct result of the Covid-19 crisis adds strength to the calls for greater oversight.

While the economy slumps, investments graced with ESG credentials outperform the rest of the market. ESG investment figures are likely to rise as this trend continues, and with that will come more opportunism and room for greenwashing.

A recent S&P Global Market Intelligence report looked at 17 exchange-traded funds (ETFs) and mutual funds with more than $250 million in assets under management based on ESG criteria. Of those, 12 have lost less value so far this year than the S&P 500 index. There have been marked differences in the declines in regular ETFs compared to non-ESG instruments.

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