Ethical investing isn’t a clear win for investors

Article Excerpt

Sustainable investing—or what used to be called ethical investing—offers some investors a lot of conceptual and emotional appeal. But does investing in those kind of stocks hurt your portfolio returns? First, it needs to be said that investment practices and results vary widely among ETFs funds that promote themselves as following an ethical or socially responsible investing philosophy. For that matter, opinions vary as to what constitutes a socially responsible investment. Cigarette makers are one obvious choice for exclusion from an ethical fund. Other investments are harder to categorize. The banks make loans to such a wide range of companies, individuals and organizations, and some borrowers undoubtedly engage in ethically questionable behaviour. Suncor Energy produces oil from the Alberta oil sands and refines gasoline used by SUVs. Sustainabity doesn’t affect performance that much One of the conclusions from a study by the investment management firm DWS and the University of Hamburg in 2018 was that firms with high environmental, social and governance scores generally do…