Probably the best indicator of the ESG sector's performance relative to other sectors is the MSCI World ESG Leaders Index, whose parent index is the MSCI World Index. The companies included in the index performed at 25.29 percent last year, according to published data, while the companies included in the parent index achieved an appreciation of 22.35 percent. [*] Top companies in the index include Microsoft Corporation, Tesla, Alphabet, Johnson & Johnson, NVIDIA, and others.
2021 was the most successful year for ESG
In terms of ESG fund investments, global inflows totalled $649 billion through November of last year, representing a 10 percent share of fund assets worldwide. It will probably come as no surprise that Reuters published information that 2021 was the most successful year to date for ESG investing.
Investments are growing every year
Looking at Refinitiv Lipper's data, we can see that investment in these assets reached $542 billion in 2020, up from "only" $285 billion in 2019. Of the total $6.1 trillion in ESG funds, up to 59 percent of the money is believed to be held in Europe, the Middle East and Africa.
ESG segment has also been affected by the development of the global economy
The current nervousness in global markets, influenced by the impact of the war, sanctions against Russia and the rapid rise in inflation across the board, has also affected the ESG investment sector. While the MSCI World ESG Leaders Index performed 2.99 percent in the first month of 2022, looking at the first quarter after the markets reacted to the invasion of Russian troops into Ukraine, we could see a decline of 6.12 percent. [*] According to MSCI's August 2022 report, this number has already decreased to 5.07 percent over the past month. [*] Considering the resilience shown by this type of investment during the pandemic, also taking into account the increasing interest in ESG segment investments, it is likely that they could outperform again compared to the market average for 2022. [b]
Olivia Lacenova - analyst at Wonderinterest Trading Ltd.
[*] Past performance is no guarantee of future results
[a, b] Forward-looking statements are based on assumptions and current expectations, which may be inaccurate, or on the current economic environment, which may change. Such statements are not guarantees of future performance. They involve risks and other uncertainties that are difficult to predict. Results may differ materially from those expressed or implied by any forward-looking statements.