As sustainable investing becomes more mainstream, both individual and institutional investors lack a uniform understanding of what this exactly means. To clarify the misinterpretation of the term, Jean Rogers, chief executive and founder of the nonprofit organization, Sustainability Accounting Standards Board, is developing uniform standards for 80 industries across 10 sectors.
From original article:
As of July 2015, assets invested in stock exchange-traded funds tracking MSCI Environmental, Social and Governance (ESG) indexes had grown nearly 30% to $1.8 billion since the start of the year. Since December 2013, assets have more than doubled, with 22 new ESG ETFs tracking MSCI indexes. In addition, MSCI has seen a huge increase in ESG indexes to more than 150 today, up from 25 in 2010.
But the investing style isn’t always easy to practice, especially for an individual investor choosing what fund to buy on his or her own. Some claims and promises are too good to be true. And even people within the sustainable business can’t agree on what is sustainable and what isn’t.