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By David GordonDirector, Eaton Vance Advisor Institute

An Ignites headline recently caught my eye, "'There Is No ESG Alpha:' Research."1 The referenced research suggests that any outperformance from responsible investing comes from quality factors inherent in the stocks, "rather than any intrinsic ESG trait."

Perhaps this observation misses a broader point — many clients may be more attracted to how responsible investment products invest than to how they perform.2 These evolving preferences suggest that outperforming a benchmark may be less important to some investors than keeping pace with the market in a responsible or sustainable way. If you haven't discovered yet what drives the appetite for responsible investing for clients, consider asking a few questions:

  1. "Is growing your personal wealth more important to you than contributing to a better world or would you like to do both?"
  2. "Is portfolio performance the only way you measure investment success?"
  3. "What would you like your portfolio to say about you?"

How clients answer these questions will tell you a lot about why so many investors are interested in responsible investing. In addition, successful advisors work to meet clients' needs and concerns that go well beyond performance.

Bottom line: The "emotional alpha" that comes from investing responsibly in pursuit of financial goals is very important to most responsible investors. Advisors should not let headlines like this one deter them from discussing responsible investing with interested clients.