Does Going Green Pay the Green: A Comparative Analysis of Environmentally Friendly Funds and Conventional Investments

Abstract

As the demand for more environmentally friendly businesses continue to grow, companies are forced to adopt corporate policies and think about both the bottom line and its overall environmental impact. Terms like green and sustainable are used but are loosely defined and similarly do not communicate to shareholders and investors to what extent a company is green or environmentally friendly. Findings resulted in the realization that defining green and sustainable funds can take a broad or more narrow approach. The findings showed that sustainable investments funds do perform well but are not outperforming the largest mutual funds and exchange-traded funds (ETFs).