Esg vs impact investing june market reports reveal that
June market reports reveal that ESG-focused US equities posted Sharpe ratios of 1.14 over the trailing year, compared to 0.98 for traditional benchmarks. In ESG vs Impact Investing analysis, impact strategies tend to align with thematic growth sectors, driving higher variance in returns. “I think ESG is in transition. There's little question there's institutional demand. Retail demand inside the U.S. has largely flagged,” he said. “But ESG is a global phenomenon that is going to do continue to be driven by institutions, and institutions generally prefer indexing over picking hot hands for the obvious predictability and control reasoning.” But internally, the priorities were reversed. For example, survey respondents reported that “to earn the trust and respect of senior managers,” it was more important for associates to have “strong expertise and experience related to finance” than “strong expertise and experience related to social and/or environmental impact.” The brief’s starkest results related to compensation — specifically carried interest (fund managers’ share of investment profits). The survey results showed that impact funds were much more likely to base carried interest on the fund’s financial performance than on its social and/or environmental impact. Goldman Sachs research indicates that ESG revenue growth will decelerate to 8.5% in 2024, while impact portfolio revenues tied to healthcare access could post 12.7%. Such sectoral bifurcation is shaping cross-asset allocation decisions in sustainable finance desks.
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