The Informed Investor

ESG Investments: Is It The Real Thing or a Passing Trend?

Randy A. Garcia, CEO

November 2, 2020

This is the first article in a series of four about ESG Investing.

Investing trends often appear quickly and fade just as fast. But an interesting one has come on the scene—and stayed. That trend is Socially Responsible Investing, or “ESG” (which stands for Environmental, Social, and Governance Investing).

And this is good news for most investors. The idea that you can benefit financially while doing good things in the world is compelling.

The data shows that many people all over the world are enthusiastic about that concept; people have invested record amounts into these sustainable investment funds this year. According to Morningstar, over $71.1 billion globally was invested just between April and June of this year, pushing total assets under management in ESG funds to over $1 trillion.[i]

That is even more dramatic given the popularity of “passive” investments, meaning those that simply try to mimic the holdings and performance of an established index. Instead, these ESG funds require an active manager, since researchers need to find and verify that companies uphold these ESG standards.

More Than Just a Pretty Face

No one in their right mind is likely to argue that doing good in the world isn’t important, but can it benefit investors? More good news: research suggests that socially responsible investing is profitable. A study by Blackrock showed that year to date (between January 1 and May 11, 2020, as of the study), 88% of ESG funds it studied beat their parent benchmarks.[ii]

That is just short-term performance data. However, other research looking at the long-term performance of a sample of 745 Europe-based sustainable funds showed that the majority of ESG strategies have done better than conventional funds over one-, five-, and 10-year periods. [iii]

Getting Noticed

With millions of dollars flowing into socially responsible funds, the business world cannot help but notice. Companies that adhere to strict ESG standards are being rewarded with more investment capital and higher stock prices, so that is definitely catching the attention of corporate executives.

And as more companies take notice, there is pressure on other firms to keep up. Therefore, it is likely that the growth of ESG investing will simply continue to increase.

COVID-19 Accelerating the Trend

The concept of sustainable investing started gaining ground in the early 2000s, but with the onset of COVID-19, the trend has steadily increased in popularity. Early ESG supporters had concerns that the pandemic would simply sideline these themes, with many businesses simply focusing on survival. Surprisingly, however, the ESG trend has instead caught even more attention, as the themes of climate change, response to the pandemic and other factors take the spotlight on the world stage.

A survey by the Principles for Responsible Investment Academy (PRI) found that along with concerns about climate change, this year has brought about a surge in social themes.[iv]

These include concerns such as:

  • Occupational health and safety
  • Social safety nets to protect low-income Americans from poverty and hardships
  • Worker protections
  • Responsible purchasing practices
  • Diversity
  • Digital rights and privacy

Financial Sustainability

There has been another surprising finding: the most socially responsible corporations can be the most financially sustainable organizations, too. Blackrock’s researchers found that during times the market fell in 2020, ESG indexes fell by less. Specifically, Blackrock’s work showed that 94% of ESG funds it studied beat their parent benchmarks during the volatile first quarter of 2020.[v]

This unique combination of sustainability along with resilience is, of course, encouraging even more investment.

Incorporating ESG into Your Portfolio

As a long-time wealth manager, I have been helping clients tailor their portfolios to fit their values for over 40 years. Now, doing so is easier, and more clients are definitely asking.

As an investor, you have a choice of incorporating socially responsible themes in several ways:

  • Finding mutual funds and exchange-traded funds (ETFs) that provide ESG-themed investments
  • Researching individual companies that meet certain ESG themes
  • Choosing your investments based on ESG ratings

When you do this research, remember that this is a relatively new field. There are funds and ETFs that carefully research, assemble, and monitor these investments, but there are some that simply try to capitalize on the trend. There are also ESG rating agencies, but they are dealing with information that isn’t standardized and a field that has no regulation.

So that means more care needs to be taken. If you are buying a fund or ETF, you need to look even closer at management (which you or your financial advisor should be doing already).

And as with all of your investments, fees and expenses always count. Because any ESG funds require research, you are going to be paying more in active management fees. Fortunately, the ESG industry is large enough that you can also screen for reasonable expenses.

You or your financial advisor should always be monitoring investments, too, since a change in fund management may mean a different level of research, commitment to ESG principles, or other surprises that might impact your investment.

Finally, always use a fiduciary advisor who by law has to put your interests first. (Learn more about the critical importance of hiring a fiduciary in my March 9, 2020 blog entitled What is a Fiduciary Advisor and Why Do You Need One?)

Shaping Tomorrow’s World

With investors no longer having to necessarily make the choice of profit over doing the right thing, the forces at play may help shape our world for the better going forward. Whether it is focusing on lower exposure to fossil fuels or supporting better ESG corporate practices, the future looks brighter than ever.

Working With ICC

ICC is an independent fiduciary financial advisor with decades of experience in wealth management. If you have $1,000,000 or more in investable assets, contact us today to learn more about ESG investing and our other services.


[i] Riding, Siobhan. ESG Funds Attract Record Inflows during Crisis. 10 Aug. 2020,

[ii] Sustainable Investing: Resilience amid uncertainty. 2020,

[iii] Shrma, Abhishek. Majority of ESG Funds Outperform Wider Market over 10 Years. 23 Sept. 2020,

[iv] “COVID-19 Accelerates ESG Trends, Global Investors Confirm.” PRI, PRI Academy, 3 Sept. 2020,

[v] Sustainable Investing: Resilience amid Uncertainty. 2020,


The Investment Counsel Company of Nevada (“Company”) is an SEC registered investment adviser located in Las Vegas, Nevada. Company may only transact business in those states in which it is registered, or qualifies for an exemption or exclusion from registration requirements. Company’s web site is limited to the dissemination of general information pertaining to its advisory services, together with access to additional investment-related information, publications, and links. Accordingly, the publication of Company’s web site on the Internet should not be construed by any consumer and/or prospective client as Company’s solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice for compensation, over the Internet. Any subsequent, direct communication by Company with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. A copy of Company’s current written disclosure Brochure discussing Company’s business operations, services, and fees is available from Company upon written request. Company does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Company web site or incorporated herein, and takes no responsibility therefore. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment or investment strategy (including those undertaken or recommended by Company), will be profitable or equal any historical performance level(s).

Certain portions of Company’s web site (i.e. newsletters, articles, commentaries, etc.) may contain a discussion of, and/or provide access to, Company (and those of other investment and non-investment professionals) positions and/or recommendations as of a specific prior date. Due to various factors, including changing market conditions, such discussion may no longer be reflective of current position(s) and/or recommendation(s). Moreover, no client or prospective client should assume that any such discussion serves as the receipt of, or a substitute for, personalized advice from Company, or from any other investment professional. Company is neither an attorney nor an accountant, and no portion of the web site content should be interpreted as legal, accounting or tax advice.

Please Note: Limitations: Neither rankings and/or recognition by unaffiliated rating services, publications, media, or other organizations, nor the achievement of any designation or certification, should be construed by a client or prospective client as a guarantee that he/she will experience a certain level of results if Company is engaged, or continues to be engaged, to provide investment advisory services. Rankings published by magazines, and others, generally base their selections exclusively on information prepared and/or submitted by the recognized adviser. Rankings are generally limited to participating advisers (see below as to participation data/criteria, to the extent applicable). Unless expressly indicated to the contrary, Company did not pay a fee to be included on any such ranking. No ranking or recognition should be construed as a current or past endorsement of Company by any of its clients.

ANY QUESTIONS: ICC’s Chief Compliance Officer remains available to address any questions regarding rankings and/or recognitions, including the criteria used for any reflected ranking. Please review Important Disclosure Information set forth in the last section of this website.

The Barron’s Top 1200 Financial Advisors by State ranking is based on data provided by over 4,000 of the nation’s most productive advisors. Factors included in the rankings are: assets under management, revenue produced for the firm, regulatory record, quality of practice, and philanthropic work. There is no cost or fee to participate in this survey. The questionnaire is completed and submitted online.

The Barron’s Top 100 Independent Advisors ranking reflects the volume of assets overseen by the advisors and their teams, revenues generated for the firms, and the quality of the advisors’ practices. The scoring system assigns a top score of 100 and rates the rest by comparing them with the top-ranked advisor. There is no cost or fee involved to participate in this survey. The questionnaire is completed and submitted online.

The Forbes “America’s Top Wealth Advisors” ranking was developed by SHOOK Research and is based on in-person interviews and telephone due diligence meetings and a ranking algorithm that includes client retention, industry experience, review of compliance records, firm nominations and quantitative criteria, including assets under management and revenue generated for their firms. Investment performance is not a criterion because client objectives and risk tolerances vary and advisors rarely have audited performance reports.  Rankings are based on the opinions of SHOOK Research, LLC and not indicative of future performance or representative of any one client’s experience. Rankings and recognition from Forbes are no guarantee of future investment success and do not ensure that a current or prospective client will experience a higher level of performance results, and such rankings should not be construed as an endorsement of the advisor.  Neither Forbes nor SHOOK Research receives compensation in exchange for placement on the ranking.

The Forbes ranking of “Best-In-State Wealth Advisors,” developed by SHOOK Research, is based on an algorithm of qualitative criteria, mostly gained through telephone and in-person due diligence interviews, and quantitative data. Those advisors that are considered have a minimum of seven years experience, and the algorithm weights factors like revenue trends, assets under management, compliance records, industry experience and those that encompass best practices in their practices and approach to working with clients. Portfolio performance is not a criteria due to varying client objectives and lack of audited data. Neither Forbes or SHOOK receive a fee in exchange for rankings.