Passive investing and sustainability are incompatible
Sustainability investing requires active choices and so cannot be done purely passively, Robeco quant specialists say.
- Passive funds buy the entire market without using ESG factors
- Sustainable indices are active, not passive strategies
- Best of both worlds is possible with sustainable enhanced indexing
In a new note, David Blitz and Wilma de Groot argue that sustainability and passive investing are fundamentally irreconcilable investment philosophies, and investors must therefore choose one style or the other.