Why Sustainability Investing May Be Retailing’s Crypto

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It may seem like sustainability and ethical consumerism have been front-page news for a long time, but as a set of measurable corporate goals by which to tell the good guys from the bad guys — formally known as ESG — it’s only been a couple of years since a rulebook started to take shape. 

In the past two years, the ESG movement has had an enormous impact on every aspect of retailing.

Minimum wages rose across the board. Shamed by allegations and in some cases evidence that Burberry and many other brands and retailers were destroying returns and excess inventory, all consumer-facing companies now have major plans to reduce energy use, waste, and so on. That’s what consumers want. 

Those consumers with wealth flocked to funds that promise to invest only in companies that abide by ESG standards. Assets held in ESG funds surged in 2021 to $2.7 trillion, a 50% increase over 2020, according to data cruncher Morningstar. Wall Street firms were happy to oblige by rebranding funds as ESG and launching new ones.

Like crypto, sustainability-driven investing is a great idea that no one can accurately define.

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