Environmental, social and governance (ESG) investments should form part of every investor’s investment portfolio to build wealth over the long-term, according to deVere Group’s Nigel Green.
Data from Bloomberg Intelligence suggests that global ESG assets are on track to exceed $53 trillion by 2025, accounting for more than a third of the $140.5 trillion in projected total assets under management.
Green said: “In January 2020, we identified that ESG would be this decade’s ultimate investment megatrend. Of course, that was before the pandemic that has acted as a catalyst for the sustainable investing boom.
“The health of our planet and how it affects human health which, in turn, affects the way we all live, interact and do business, dramatically came to the fore. Previously ESG investments were often considered a ‘quirk’ or ‘nice to have’ but now we believe that they should be part of everyone’s investment portfolio.”
Green argues that ESG investments act as an effective diversification tool, allowing investors to seize opportunities and mitigate risk especially during periods of higher volatility. They have also outperformed their benchmarks over recent years.
In addition, they represent what Green describes as a “revolution of investment strategy itself.”
Green explained: “A seismic shift has occurred in corporate behaviour. How firms approach ESG factors and the value they place on them compared to other considerations has already changed forever.
“The ESG themes are already embedded in the global economy as this is only set to grow in the years to come and of course investors should embrace the concept of having early advantage.”
The pandemic has only sought to reinforce this view, according to Green, with the past two years underscoring the moral obligation to back and fund entities that support the wellbeing of the planet and society.
In October, deVere announced that it will double its commitment to position $2 billion of assets under advisement into ESG investments.
Green added: “The case for now having exposure to ESG in your investment portfolio is undeniable.
“We believe that a failure not to seek profits with purpose could negatively impact your long-term accumulation of wealth.”
