Environmental, social and governance (ESG) investing endured significant political scrutiny in recent years, but an array of studies suggest that scrutiny that didn’t negatively affect some market participants’ views of this investing style.
That’s good news for ETFs such as the Invesco ESG Nasdaq 100 ETF (QQMG) and the Invesco ESG Nasdaq Next Gen 100 ETF (QQJG). Both ETFs have been around more than four years, confirming they survived the worst of the politically charged ESG criticism. Specific to these ETFs, they’ve done an admirable job of delivering returns on par with their parent Nasdaq indexes, reminding advisors and investors that ESG investing doesn’t require leaving gains on the table.
Performance is something for investors to lean on, particularly at a time when some perceive the future of ESG investing as uncertain. Fortunately, it’s not, and there are valid reasons to believe ETFs such as QQMG and QQJG have staying power.
ESG Perspectives Are Changing
Cementing the notions that ESG investing isn’t going anywhere and that could be positive for QQJG and QQMG is the point that perspectives on this investment style have shifted and there appear to be positive implications on that front.
“Our research finds that enthusiasm hasn’t vanished; it has converged on a more pragmatic, risk-first approach,” noted the Harvard Business Review. “Since 2022, we have run an annual, nationally representative survey of U.S. retail investors using the same instrument, paired with surveys of large asset owners and managers. The result of our research is clear: ESG enthusiasm has not merely softened; it has converged.”
Another point in favor of QQJG and QQMG is that the demographics associated with the category are changing for the better. Put differently, what was once seen as an investment style geared toward younger participants is gaining momentum across age groups.
“The gap between younger and older retail investors has largely closed, and retail views now mirror institutions’ risk-first stance. This shift reveals something fundamental about how investors actually value ESG—with important implications for investors and corporate managers alike,” added Harvard.
Regarding perspectives, institutional investors don’t depart dramatically from their retail counterparts when it comes to ESG, indicating there’s runway for professional adoption of ETFs like QQJG and QQMG.
“Institutional investors overwhelmingly view ESG as a risk framework, not a values-driven mandate. Governance factors dominate decision-making and are widely seen as table stakes—important, but largely priced in,” notes Harvard. “Environmental considerations, almost entirely focused on climate risk, are viewed as material over medium-term horizons. Social factors play a limited role, with data security and privacy standing out as exceptions.”
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