The long and the short of ESG in the Covid-19 crisis

Resetting priorities

There has been a view that environmental, social and governance (ESG) investing was just a fad, which would go away at the end of the bull market because it was expensive and just something nice to have while the going is good.

The Covid-19 crisis is therefore a good test of ESG, with many wondering how would it perform in these exceptional market conditions? It's still too early to say anything much about how financial markets are going to turn out once this pandemic passes, but ESG has been a bit of a bear market phenomenon, with strong flows of money into ESG ETF funds during the first few weeks of the crisis, while other funds saw outflows. Why is that? Well, it could be a number of things. Perhaps people have been buying companies that score higher in terms of ESG because they have appreciated how much ...