6 min read

A Very ESG 2021

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The email header with the "For What It's Worth" logo, graphic that includes a hand holding a representation of a blooming flower that has money blooming at the top, and the tagline "Insights to invest in the world you want" underneath it.

Hey there,

This week we’ve taken a break from our usual format to highlight some of 2021’s biggest milestones and breakthroughs in values-aligned investing. We also want to thank you for making us a part of your investing journey.

We started this newsletter to demystify how to invest in ways that are good for the planet and society and to give each of you the confidence you need to move from conscious consumers to conscious investors. Concepts like ESG and impact investing have never been more popular, but we noticed few jargon-free resources online. So, in June of this year, we wrote the first edition of FWIW and have been humbled to see so many of you join us every week to learn and explore (and, we hope, chuckle a few times) with us. However you found FWIW, — through a referral from a friend, Twitter, Instagram or some other way — we are growing quickly, and it’s all thanks to your reading and sharing.

A lookback at 2021

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Meme stocks and SPACs may have grabbed the most eyeballs this year, but as we get closer to the New Year’s Eve countdown, we want to celebrate with you the big wins for socially responsible and sustainable investing. Here’s our list of 2021’s biggest milestones and breakthroughs:

1.  Sustainability and ESG funds reach record levels

In this season of good cheer, here at FWIW, we couldn't be happier to see the explosive growth in sustainability and ESG funds, as individual and institutional investors propel cash into assets that prioritize what is beneficial for the long-term.

Globally the money in funds with a sustainability objective and/or binding ESG criteria took off like a SpaceX rocket, reaching $3.9 trillion at the end of September, double what it was six months prior, according to Morningstar. In the US, these assets totaled $330 billion, 1.8 times their value at the same time in 2020. A record 38 new sustainable funds were launched in Q3, bringing the total to 484. (Keep in mind this is against the backdrop of over $1 trillion flowing into ETFs around the world this year and an explosion in new funds.)

Launched in 2016, the biggest such fund is the iShares ESG Aware MSCI USA ETF (ESGU). It ended 2019 with assets below $2 billion. By the end of 2020, it was at $13.4 billion, and as of mid-December 2021, it was at $24.5 billion. How’s that for “to the moon”?

2.  Make Way for Impact IPOs

This year US retail investors had more opportunities to put their money in mission-focused startups with social and environmental impact than ever before. Rivian, Warby Parker, Sweetgreen, Allbirds, Rent the Runway, AppHarvest, Sono Motors, and Chobani are just a few of the impact-focused companies that filed to go public or made their stock market debut this year. This expands the pool of potential investments that values-aligned investors can focus on, both now and in the future.

3.  Green technology in the fast lane

As we discussed in a recent edition, 2021 has been incredibly exciting for electric vehicles with new battery technology bringing costs down and expanding driving range. Several electric versions of America’s beloved pickup trucks were announced, something analysts hope will drive (hehe) EV adoption here. Ford’s foray into the market has generated such demand and excitement that the stock is among the top performers of 2021, up almost 125% as of mid-December. Not as sexy, but FedEx, Amazon, and UPS are also making their delivery van fleets more electric.

Challenges remain, like raw material supply, but companies are developing workarounds. However, significant expansion of funding for charging infrastructure will be crucial if half of all new car sales are to be EVs by 2030 as many people hope.

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