Prior to the COVID-19 pandemic, investors were largely focused on specific investment strategies or styles that were taking Wall Street and Bay Street by storm. One of these key strategies was the environmental, social, and governance (ESG) investing mantra which has reshaped capital inflows into entire sectors and refocused resources to where investors see the greatest need, and greatest long-term potential reward as well.
Following the plethora of institutional and retail investors into an ESG focused investment strategy has been easy for many. It does not require coaxing to consider investing in a sector that is good for the environment, the employees of the company, and consumers (as well as the general public).
This ought to be the goal of every investor to begin with. As this ESG trade has become more profitable, due to a willingness among the general investing population to pile money into such investments, this strategy has become highly profitable in addition to being altruistic.
ESG-related investments have held up quite well throughout the recent market volatility we experienced, and I think this could turn out to be a multi-decade long investing strategy with outside performance relative to other strategies.
I've combined ESG into the factors I consider in my investment model prior to making an investment, and think most investors should do the same.
The secular growth trend could provide a couple additional percentage points of growth over the long term, in my view, making ESG one of the most important ships to consider with investments for long-term investors.
Invest wisely, my friends.
