The good news is yes! There is growing evidence that returns from well-managed responsible investment are, on average, at least as high as from conventional investing.
There are many reasons why companies that do good also do well financially. Companies that behave ethically avoid fines for environmental damage, have a better reputation (which is important for their brand value) and have loyal and productive employees.
Overall, good portfolio investing means good financial returns. Because portfolios are collections of companies, high environment, social and governance (ESG) standards for individual companies result in high ESG scores and good financial returns for the overall portfolio.
Long term studies show responsible investing earns as much or more than conventional investing. There is growing evidence from credible research institutes, universities and companies showing the, on average, it pays to invest responsibly.
Higher returns are shown in some long-term comparative indexes. In 2015 Morgan Stanley research looked at the same MSCI KJD 400 index over a longer timeframe and showed that annual returns beat the US market average since its inception in 1990.
Higher returns are also shown for responsible investments in Australasia. Comparisons between responsible funds and mainstream funds show higher returns for responsible investment in the Australian market.
Despite the above, there are no guarantees that any specific responsible investment fund will earn high returns. There are always risks with investments, and responsible investing is no exception.
The good news is that, as well as good financial returns, there are also other benefits from being responsible. You invest in ways that align with your values, you shift money away from companies that pollute the environment and exploit people, and you create societal benefits. Win win win!