Active v Passive: Which strategy is better suited to ESG investing?

Splits views on fund types

James Baxter-Derrington
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Some experts argue active strategies deliver better returns than passives
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Some experts argue active strategies deliver better returns than passives

With more than half of the net £1.3bn invested in sustainable strategies in January being allocated to a single tracker fund, the debate surrounding whether active or passive strategies are better suited to ESG investing has come to the fore.

According to Morningstar, the BlackRock ACS World Low Carbon Equity Tracker fund saw net inflows of £700m in January, the largest single ESG investment, despite counting Nestlé - known for its association with various water-related scandals - as a top ten holding. Bård Bringedal, CIO of equities at Norwegian financial services firm Storebrand, attributed the success of passives in the ESG space to the passives industry being "better at marketing than effectively integrating ESG into investment processes." However, BlackRock's Marta Jankovic, EMEA head of iShares Sustainable, described...

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