• Top 3 FAQs

YOUR QUESTIONS ANSWERED

What does it mean to invest sustainably?

Definition

How does performance compare to the broader stock market?

Performance

How popular is sustainable investing?

Asset Growth

Definition

What does it mean to invest sustainably?

Sustainable investing is a proactive investment approach that goes beyond traditional financial analysis and includes the environmental, social, and governance (ESG) practices of a company.

The Tools of Sustainable Investing

Positive Screening: The preferential selection of companies with strong ESG performance relative to their peers—also known as best-in-class screening.

Negative Screening: The exclusion of companies or sectors based on specific ESG criteria such as tobacco, weapons, fossil fuels, or nuclear energy.

Active Ownership: Engaging a company as a shareholder, either formally through resolutions and proxy voting, or informally through direct dialogue.

Thematic Investing: Selecting investments based on a specific theme such as renewable energy, water conservation, and women’s rights.

Community Investing: Investing capital directly into banking and lending institutions that serve low-income and underserved communities.

Annual Total Return (%)

Sustainable Index Funds
S&P 500 Vanguard FTSE
Social Index
(VFTNX)
Calvert Large Cap Index (CISIX)
2021 28.71 27.77 25.62
2020 18.40 22.66 26.11
2019 31.49 33.96 32.82
2018 -4.38 -3.38 -4.07
2017 21.83 24.19 21.18
2016 11.96 10.34 10.71
2015 1.38 1.27 1.14
2014 13.69 15.85 14.41
2013 32.39 37.09 35.04
2012 16.00 17.84 17.71

Past performance is not a guarantee of future results.

* For further reading on the performance of sustainable investing:

Financial Performance with Sustainable Investing, USSIF: The Forum for Sustainable and Responsible Investment

Sustainable Equity Funds Outperform Traditional Peers in 2020, Morningstar

Sustainable Funds Outperform Peers in 2020 During Coronavirus, Morgan Stanley

Performance

How does performance compare to the broader stock market?

Academic and Wall Street* studies have shown a growing relationship between environmental, social, and governance (ESG) practices and superior long-term individual stock performance. But does this competitive performance hold true for a basket (index) of sustainable stocks?

To find out, we compared the performance of the S&P 500 against two sustainable fund indexes: the Calvert Social Index and the Vanguard FTSE Social Index. Although all three indexes invest passively in the overall stock market, the companies selected by the sustainable indexes also meet strict environmental, social, and corporate governance (ESG) standards.

“The idea that sustainable investing is a recipe for underperformance is a myth.”
“We believe ESG analysis is essential for a company to sustain competitive advantage.”
“Responsible Investing: Delivering competitive performance…while pursuing social goals."

Asset Growth

How popular is sustainable investing?

From large state pensions to university endowments to ordinary citizens, investors share a common desire to invest in a sustainable way. In the U.S. alone, sustainable investing has become one of the fastest-growing investment trends, with overall assets exceeding $16.6 trillion in 2020 –an astonishing increase from merely $639 billion in 1995.*

Although much of the increase is attributable to institutional investors, an overwhelming majority of women and younger investors are transforming the investing landscape by demanding investments that go beyond the traditional financial metrics and include ESG factors. *Report on US sustainable and impact investing trends 2020, U.S Social Investment Forum, 2020

% of investors that consider social, political, and/or environmental factors when making an investment decision

Women

Gen X

Millenials

High Net Worth
Investors

Sources:
Women - “2021 Women & Investing Study, Fidelity Investments
Gen X - “Sustainable Signals: Individual Investors and the COVID-19 Pandemic, Morgan Stanley, 2021 (PDF)
Millennials - Sustainable Signals: Individual Investors and the COVID-19 Pandemic, Morgan Stanley, 2021 (PDF)
High Net Worth Investors - World Wealth Report 2021, Capgemini Research Institute (pdf)

Life has compromises, investing shouldn’t be one.

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