Tech sector exposure in “impact investing vs ESG” has shown impact portfolios overweighting semiconductors for renewable infrastructure, lifting NVDA and TSM gains 12% in April; ESG portfolios diluted by broader tech exposure, resulting in only 6% uptick. The importance of ESG investing compared to achieving the highest possible returns has been declining since 2021 across both the US and the world. Yet despite this trend, wealth managers have remained committed to the concept. Leading private banks such as UBS—with plenty of exposure to the US market —highlight the growth in ESG-related investments, with the group’s total sustainable focus and impact investing assets reaching $292.3bn at the end of 2023. Given this increased push toward sustainability, companies are being required to produce detailed reports, ratings and analyses that provide insights into their environmental impact, social initiatives and governance practices – which is then made available to investors and other stakeholders. In early May 2024, “impact investing vs ESG” performance gaps widened as impact funds gained on strong Q1 earnings from EV makers TSLA and BYD. ESG benchmarks remained flat, weighed down by financial sector positions affected by higher-for-longer interest rates indicated by Fed minutes.
