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Green investing can pay off in spades

February 24, 2021, 10:54 AM UTC

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Good morning.

Green investing paid off in spades last year, according to a new report from Morgan Stanley being released this morning. CEO Daily got an early look. A few takeaways:

—The median return on sustainable equity funds was 19.04%—compared to 14.77% for non-sustainable.  That’s a 4.3% difference in return.

—Sustainable bond funds also outperformed non-ESG counterparts, yielding 6.74% compared to 5.86%.

—Sustainable funds at the start of 2020 had grown 42% since 2018, and accounted for $17.1 trillion dollars under professional management in the U.S.—or about one of every three dollars. Inflows continued throughout the year.

Past performance, of course, is no guarantee of future results.  The fact that Tesla soared while Exxon tanked could be one big reason for the variance—and could easily reverse as we emerge from the pandemic.

But at the very least, the study should provide further proof that doing what’s right for the environment and doing what’s right for your finances aren’t necessarily at odds. Morgan Stanley CEO James Gorman said the study shows sustainable investing has hit a tipping point:

“When we started our Global Sustainable Finance Group in 2009, we viewed sustainable investing as the future of finance.  Today, we are seeing that it has reached the mainstream. As technology and data continue to advance and empower the field, more and more investors are making decisions with an ESG mindset.”

More news below.

Alan Murray


COVAX time

Ghana has received the first COVID-19 vaccines distributed through the global COVAX facility, which is designed to ensure low to mid-income countries can also get inoculated. This isn't just an ethical issue; it should also help avoid prolonging the pandemic, as unvaccinated populations anywhere in the world will provide a breeding ground for new variants that could bite richer countries, too. Fortune

HKEX shares

Hong Kong Exchanges & Clearing Ltd shares lost nearly a tenth of their value today, as Hong Kong increased stamp duty on stock trades for the first time in nearly three decades. Fortune

Vaccine surge

The big COVID-19 vaccine manufacturers have promised Congress that a supply surge will appear in the coming weeks. Pfizer, Moderna and Johnson & Johnson said their output would be able to fully inoculate 130 million Americans by the end of March. Reuters

Bitcoin surge

The Very Stable Cryptocurrency that is Bitcoin has partially recovered from its latest slump, ramping up above $50,000 again. This time, the driver is apparently a comment from Ark Investment Management head Cathie Wood, who said she is "very positive on Bitcoin." Fortune


Loan forgiveness

President Biden said Ivy League graduates don't need their student loans forgiven, while others do. Rakim Brooks, an ACLU campaign strategist and Brown University graduate, disagrees. He writes for Fortune in support of calls (from the likes of Chuck Schumer and Elizabeth Warren) for debts of up to $50,000 to be forgiven: "The cold truth is that an education, including from the Ivy League, does not guarantee financial mobility for every graduate." Fortune

Gig economy

European regulators are about to consult on new rules for the so-called gig economy. However, as existing legislation in Spain demonstrates, there's a danger of focusing only on drivers and couriers, as the most prominent examples of gig-economy workers, while ignoring sectors such as elderly care or workers on platforms such as Amazon's Mechanical Turk. Politico

IPO diversity

Of the top 25 U.S. IPOs last year, only one involved a company with an all-male board. Two years previously, nearly half of the top newly-floating companies had no women on their boards. Fortune

Stakeholder economy

Attorney and consultant Robert Peres writes for Fortune that German-style stakeholder economy models, where employees and unions get board seats, have not worked out well in Germany. The Biden administration is considering such models, but, Peres writes: " Giving too much influence to employee representatives negatively impacts the viability of a corporation. In the case of management salaries and bonuses, the German unions have often sided with the board and let exaggerated pay-outs pass through." Fortune

This edition of CEO Daily was edited by David Meyer.