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2020 Outlook: Responsible Investing

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By John StreurPresident and CEO, Calvert Research and Management

Washington - Today, a growing number of investors want to beat the market and they want to do it with investment strategies that include companies that are not damaging the environment, yet that are treating people equitably.

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In fact, more and more investors want portfolios that are actually driving positive change, and that are part of solutions.

So throughout 2020 we expect to see a continuation of the asset flow trends that marked the breakout year 2019, and an increasing focus on positive impact.

Go beyond greenwashing

There are two massive trends that are critical for investors to understand. First of all, we've seen a real convergence in terms of companies adopting the easy activities that bolster their ESG image. Could be a little bit of greenwashing — call it what you will.

But the other big trend is that there's an emerging group of companies worldwide that is doing a very good job at the critical issues of environmental efficiency, mitigating their damaging effects on the climate. They're also building diversity and inclusiveness within their companies.

Focus on research and engagement

As investment managers, we've got to be able to do our proprietary research. When we go deep at the company level, we can understand which companies are just doing a better job filling out the investor surveys and making themselves look good, versus those companies that have operationalized ESG performance.

Corporate engagement is also very important, always has been, but it's increasing in relevance every day.

Bottom line: There's been a tremendous move toward low cost, passive investing. For asset managers to really justify value-added fees, clients today expect them to do more than just move in and out of stocks. They want investment management firms that can drive positive change at the companies in which they've invested. That's where we see investment management going.

The views expressed in these posts are those of the authors and are current only through the date stated. These views are subject to change at any time based upon market or other conditions, and Eaton Vance disclaims any responsibility to update such views. These views may not be relied upon as investment advice and, because investment decisions for Eaton Vance are based on many factors, may not be relied upon as an indication of trading intent on behalf of any Eaton Vance strategy. The discussion herein is general in nature and is provided for informational purposes only. There is no guarantee as to its accuracy or completeness.