How integrating social factors into portfolios can drive returns

Momentum in ESG investing, which gathered pace post the Covid pandemic, continued in 2022. This came despite increasing scrutiny of ESG fund classifications and downgrades by issuers and rating agencies of those funds that were not meeting the often hazy thresholds for Article 8 and Article 9 funds. According to data from Morningstar, ESG fund flow performance strongly outpaced the non-ESG focused counterparts in 2022. We believe that in future, integrating ESG considerations into the investment process will become the norm, similar to financial analysis.  It is not surprising the so...