When It Comes to ESG, Investors Want Specifics – And they Should


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At our recent Spark Disruptors roundtable on the impact of robo-advising and investing on the market, the conversation turned to how robo companies have handled the sometimes obfuscated world of ESG, or socially responsible investing, where, say, a private prison can end up in a socially conscious investor’s fund because it meets green-energy requirements.

As of late 2020, about $22 billion had flown into ESG ETFs, nearly three times the number from 2019, according to Bloomberg. What counts as ESG, however, has no official guidance or regulation by the SEC, leaving the label to mostly be an exercise in subjectivity for investors and advisors.

And in that sense, it’s all about specifics for investors.

Watch as Betterment’s Dan Egan says that the company’s general SRI portfolios have been less attractive to investors in recent years, who have instead flocked instead to more specific collections they had put together on social justice and climate. You can watch the full panel here, moderated by Ken Schapiro, and featuring additional panelists Jennifer Mitton and Claire Beams.