Why Impact Investing’s Time Has Come

Media Coverage February 25, 2019

Full article available on ETF.com
By Debbie Carlson

Summary 

Environmental, socially responsible, and governmental (ESG) investing has evolved over the years, from simply screening out companies based on religious, moral or ethical grounds, to including companies as a way to reward good behavior, or encourage them to change business practices.

ESG lets investors better pinpoint favored causes, such as addressing climate change or advocating for more women on corporate boards. Responsible investing’s latest evolution focuses on impact, which seeks even more targeted ways to support a cause.

The latest spate of ETFs focusing on cause-based themes includes the Impact Shares YWCA Women’s Empowerment ETF (WOMN), the Impact Shares NAACP Minority Empowerment ETF (NACP) and the Goldman Sachs JUST U.S. Large Cap Equity ETF (JUST).

Dueling Trends
Two phenomena coincided to promote ESG evolution: more data and client demand. Stronger computer power and improvements in technology such as artificial intelligence have led to greater data available and more ESG niche data providers, says Hendrik Bartel, co-founder and chief executive officer of data provider Truvalue Labs, allowing index providers to offer differentiated products.