(Illustration by Moondance via Pixabay)

I HAVE BEEN a sustainable investor since starting my financial services career in Boston more than 40 years ago, decades before the United Nations branded the idea of using environmental, social and corporate governance factors as a set of investment principles in the early 2000s.

It was fascinating to watch ESG become part of the global zeitgeist and the speed at which the global financial services industry productized it. By the time Morningstar began tracking the category in 2018, there were thousands of ESG-related funds. Publicly held companies met the moment by publicizing environmental stewardship commitments and adopting diversity policies. Even the fossil fuel industry launched clean energy initiatives.

The wave was truly unlike anything we had seen before: a seemingly widespread acknowledgement that sustainable growth is tied to a sustainable planet, that being a good business is good for business, and that ESG investing is just plain solid investing because, at its foundation, it is all about evaluating risks.

Today, the tide has turned. The term ESG has become so politically charged that funds and firms are removing the language. The abrupt branding reversals are driven largely by political backlash and regulatory pressure rather than shifts in underlying investment approach.

So, fine. Maybe we should say good riddance to a term that, in addition to turning into political kryptonite, had also become so diluted, many are questioning whether ESG funds were actually using what one would assume are the basic guidelines for investing capital in environmentally, socially and economically responsible companies.

But, make no mistake, firms may have abandoned the labels, but good investment managers must continue to incorporate environmental, social and governance risk analysis. They have to, because whether or not you believe that humans are responsible, our planet is warming. Fundamental resources such as water and food supplies are being dramatically impacted. Small towns and cities alike are experiencing more frequent weather-related devastation events. Supply chains are being interrupted.

All of these factors impact global economies and the cost of doing business.

Companies must acknowledge and address the risks they face from the new and developing climate-related extremes.

In Security Analysis—a foundational text for modern investing—Benjamin Graham and David Dodd wrote that sound investment requires both quantitative and qualitative insight. They admitted qualitative factors were “exceedingly important,” even if difficult to measure.

For most of its history, Wall Street largely focused on the balance sheets while ignoring equally crucial issues like corporate culture, environmental practices, and leadership ethics. It became easier to evaluate these qualitative factors when responsible investing gained traction and public companies started reporting on their practices and initiatives.

Today, some companies are disclosing less about diversity, climate initiatives, and labor practices to avoid political attention. But inside their C-suites and boardrooms, leaders understand that risks don’t evaporate when disclosure declines. Political cycles are short. Business cycles are long.

The investment firms best positioned for the future are those that manage real risks—regardless of how loudly critics shout “woke.” Sustainable investing has never been about sacrificing returns for virtue. It has always been about aligning capital with long-term value creation.

From January 2006 to December 2025, the equity portion of our Global Sustainable Balanced Composite generated a cumulative return of approximately 565 percent after fees, exceeding its equity benchmark by approximately 152 percent. Past performance is no guarantee of future results, but nearly two decades of evidence demonstrate that companies with fewer liabilities, stronger governance, and more resilient business models can support strong long-term outcomes.

Milton Moskowitz, one of the early thinkers in socially responsible business, argued that companies attuned to society’s needs would outperform over time. In a city like Boston—defined by community engagement, education, and innovation—that perspective feels intuitive.

We live in a region that prides itself on solving hard problems and advancing the common good. Our investors, universities, and entrepreneurs are a driving force in advancing world-changing ideas.

No matter what you call it, sustainable investing isn’t a trend or a political gesture. It is thoughtful, disciplined investing—something Boston, birthplace of the mutual fund, has helped lead for decades. When we account for the full picture of risk and opportunity, we make better decisions, we prosper, and yes, we can feel good about it too.

Patrick McVeigh is the founder and president of Reynders, McVeigh Capital Management, a Boston-based firm focused on sustainable investing.