Contact Us United States | Institutional Investor Login Our Firm Strategies and Solutions Sustainable Investing Insights SEARCH What is Sustainable Investing? Why Sustainable Investing? Why AllianzGI? Sustainable Ideas Sustainability Day Sustainable Solutions Why Sustainable Investing? At Allianz Global Investors, Environmental, Social and Governance (ESG) factors are central to our work. Why? Because, as evidenced by a growing body of empirical research, understanding ESG factors can help us better manage risk and enhance potential long-term returns. Understanding ESG risk starts with research. ESG research is vital because, as the risk spectrum evolves, traditional fundamental analysis no longer captures all of the myriad risk factors that can impact long-term investment performance. Further, the knowledge needed for successful ESG investing, in our view, demands a level of depth not currently reflected in third-party, off-the-shelf analytical solutions. In other words, proprietary research is key to success. Further, demand for Sustainable Investing is increasing rapidly: ESG allocations now account for more than one of every four dollars professionally managed in the US.¹ As a result, incorporating sustainability into investment decisions and actively engaging with portfolio companies to promote good ESG practices goes beyond just “doing good,” it’s also good business. Rising allocations to Sustainable Investing suggests this is the future Growth of ESG incorporation by money managers, 2005–2018 Source: US SIF Foundation, Sustainable and Impact Investing — Money Managers 2018 Myth busting Despite the rapid growth of Sustainable Investing, some common misconceptions persist. However, a growing body of academic research and empirical evidence debunks the most common myths about Sustainable Investing. Myth: Sustainable Investing produces lower returns Myth: Sustainable Investing is a niche strategy Myth: Sustainable Investing is too expensive Myth: Sustainable Investing reduces portfolio diversification Myth: Sustainable Investing is only for idealists Myth: Sustainable Investing is not viable without subsidies Demand for sustainable investments among institutional investors is growing Visit our Sustainable Ideas page for more insights about investing for financial and social outcomes. 1. US SIF Foundation, SRI Basics. 2. ESG in Equities, Dr. Steffen Hörter, Page 17. 3. US SIF Foundation, SRI Basics. 4. How do ESG factors impact portfolio performance? Dr. Steffen Hörter, June 2019. 5. ESG in Sovereign Bonds, Dr. Steffen Hörter, Page 26. 6. ESG in Equities by Dr. Steffen Hörter, Page 26, Appendix. Meta-studies on ESG performance effects. Investing involves risk. The value of an investment and the income from it will fluctuate and investors may not get back the principal invested. 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