“Greed, for lack of a better word, is good.”

In 1987, Gordon Gecko finally articulated what had long been Wall Street’s battle cry. 

But investors worldwide – mostly – had already leaned into more socially responsible investing by steering clear of apartheid South Africa in the mid-to late-1980s.

Perhaps inspired by the rise of a global corporate conscious, the United Nations launched The United Nations Framework Convention on Climate Change (UNFCCC) in 1992 to tackle rising greenhouse gas emissions.

Finally, after decades of a laser-like focus on the bottom line, investors started to pivot toward “responsible investing” in the early aughts. The movement celebrated its coming out with the 2005 publication of “Who Cares Wins 2005 Conference Report: Investing for Long-Term Value.”

That landmark report gave voice to the silent majority of institutional investors, asset managers, research analysts, and others who felt that environmental, social, and governance (ESG) considerations would play an increasingly crucial role in long-term investment strategies.

“Global sustainable fund assets recovered in the fourth quarter to hit nearly $2.5 trillion at the end of December,” according to the analysts at Morningstar. “Europe continued to make up the lion’s share of the sustainable fund landscape with 83% of global sustainable fund assets. It remains the most developed and diverse ESG market, followed by the U.S., which housed 11% of global sustainable fund assets through December 2022.”

The report – and the trillions of dollars investors have poured into these funds – have made it clear that, when it comes to investing, good could be good, too.

Environmental

ESG investing has exploded since then to play a crucial role in alternative investment strategies.

The E of ESG, which consistently gets the most attention, focuses on issues that affect the planet, such as climate change, pollution, biodiversity, waste management, and the responsible use of natural resources.

The financial services industry has responded enthusiastically. Based on the 2022 numbers from the Task Force on Climate-related Financial Disclosures, more than “60% of asset managers and over 75% of asset owners surveyed indicated they currently report climate-related information to their clients and beneficiaries, …