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Sustainable Investing Glossary

ESG funds

ESG funds are portfolios of equities and/or bonds for which environmental, social and governance factors have been integrated into the investment process. This means the equities and bonds contained in the fund have passed stringent tests over how sustainable the company or government is regarding its ESG criteria.

An ESG fund should contain only those securities with a high sustainability score and would exclude companies with, for example, poor records on pollution, labor relations or management practices. It would also exclude the sovereign bonds of governments with similar poor records. 

Research has shown that the use of ESG in security selection leads to better-informed investment decisions, and that sustainability funds can perform better than non-sustainable ones, partly because of better risk management over contentious issues. Companies with a lower carbon footprint, for example, would face lower regulatory or societal risk than a polluter, and so its shares should be less volatile over time. 

ESG funds are growing in popularity among investors who want to be seen to be making a contribution to cutting global warming and adding to human development, without compromising on financial returns. Both Robeco and RobecoSAM offer ESG funds in their respective SI ranges.

Also read: The pros and cons of ESG ratings for investment funds

ESG investing
ESG investing
We integrate environmental, social and governance criteria into the majority of our investment processes.
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This page is intended for US prospects, clients and investors only and includes information about the capabilities, staffing and history of RIAM US and its participating affiliates, which may include information on strategies not yet available in the US. SEC regulations are applicable only to clients, prospects and investors of RIAM US. Robeco BV, Robeco HK and Robeco SH are considered a “participating affiliate” of RIAM US and some of their employees are “associated persons” of RIAM US as per relevant SEC no-action guidance. Employees identified as associated persons of RIAM US perform activities directly or indirectly related to the investment advisory services provided by RIAM US. In those situations, these individuals are deemed to be acting on behalf of IUAM, a US SEC registered investment adviser.

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