Data published by Fitch Ratings suggests that the exclusion of energy sector firms from ESG portfolios has boosted the returns of some funds.
As of 1 April, the S&P500 ESG index has outperfomed by the S&P500 over one, three and five year periods. The respective returns have been: One year: -4.30% & -6.98%. Three Years: 6.18% & 5.1% and Five years: 7.33% & 6.73%. Over the same periods the S&P500 Energy Sector Index has fallen by 52.4%, 21% and 14%.
As ESG funds look to exclude firms with emissions and climate change issues such as oil and gas producers, this trend looks likely to continue and could be further boosted by the recent drop in oil prices.