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Investors Still Prioritizing ESG

The fanfare and hoopla surrounding environmental, social and governance (ESG) investing seen several years ago has largely waned, but that doesn’t mean ESG and sustainable investing principles are no longer prioritized by advisors and investors.Actually, those investment styles remain priorities. That’s potentially good news for ETFs like the Invesco ESG Nasdaq 100 ETF (QQMG B-) and the Invesco ESG Nasdaq Next Gen 100 ETF (QQJG C+). Proving that ESG need not require sacrificing returns, QQMG and QQJG are again delivering for investors this year. QQMG, which is an ESG spin on the Nasdaq-100 Index (NDX), is higher by 20.60% year-to-date. Meanwhile, QQJG is higher by 16%. Those performances are important, because they not only allay concerns at the performance level, but those showings could also indicate that some of the harsh political rhetoric aimed at ESG investing over the past several years was more bark than bite. PitchBook’s Sustainable Investment Survey indicated that there’s still enthusiasm for ESG investing and, in what could be a positive for ETFs such as QQMG and QQJG, the messaging is evolving. “The majority of respondents have continued to maintain or even increase their focus on ESG, impact investing, and DEI. Respondents included fund managers, asset owners, funds of funds, private wealth advisors, family offices, investment consultants, and others,” according to the research firm.ESG Still Has TailwindsPerhaps in “stealth mode,” ESG as an investment methodology still has plenty of devotees and continues gaining traction among asset allocators — trends that could also be supportive of long-term growth for funds like QQJG and QQMG. “A larger share of respondents this year are active practitioners of both ESG and impact investing. Among respondents, 72% say they currently incorporate ESG factors into their investment evaluation and management process. Just 5% indicated that they used to, but no longer do,” added PitchBook. In what could prove to be another positive for the long-term trajectories of QQJG, QQMG and related funds, ESG and sustainable investing remain front-and-center for many advisors and professional investors in a political environment that’s overtly hostile to those methodologies. “It appears that the economic and geopolitical events of the past year—from the enactment of anti-ESG and anti-DEI policies and retraction of support for renewables in the US to the continuation of the challenging dealmaking and exit environment and escalation of global trade tensions—have not deterred many from their sustainable investment strategies,” concluded PitchBook. “Of those that have at some point in time engaged in ESG, 87% have either maintained or increased their focus over the past year. For impact investing, this number is 89%. And for DEI, it’s 90%.” For more news, information, and analysis, visit the ETF Education Content Hub.

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