By Henrike Hein, Jan. 21, 2023
The prejudice that sustainable investments generate lower returns has persisted for some time. However, this prejudice has been refuted in a number of studies.
Sustainable investments therefore offer at least as high a potential return as investments without a sustainability claim. On the contrary, it has been shown that sustainable investments even yield higher returns and offer several other advantages. Apart from having a clear conscience when investing, sustainable investments are also simply more crisis-proof.
The following factors play a role in the investment:
As early as 2015, a meta-study found that the majority of ESG criteria have a positive impact on returns. More than 2,000 studies were summarized. The well-known MSCI World stock index generated a return of 183% between 2007 and 2019, but was still outperformed by its "sustainable" counterpart, the MSCI World Social Responsibility Index, by more than 15 percentage points at 198%. In its annual analysis of the market for financial products, the European securities regulator ESMA also concludes that even in the crisis year 2020, sustainably oriented funds outperformed conventional strategies. What's more, they were also less expensive. It is therefore not only worthwhile investing sustainably for ethical reasons.
However, most so-called „green“ ETFs are not really sustainable. Scandals and greenwashing allegations are piling up. Find out why this is the case in the blog post „What are ETFs and are they really sustainable?“.