Companies are increasingly understanding the importance of reporting on their ESG values. A report from audit firm PwC in October showed how quickly this change has happened.
"The percentage of S&P 500 companies issuing sustainability reports has jumped to 80 percent in 2015 compared to 20 percent in 2011," said Sara DeSmith, U.S. sustainable business solutions assurance leader at PwC, in a press release.
"With this increased reporting comes added expectations from investors on what these findings mean for them when taking a stake in a company."
Bartel claimed that investors who incorporate ESG into their decision making would see a positive uptick on their returns.
"That's what we are starting to see with some of the pioneers that have successfully implemented an ESG strategy," he said.
In fact, a Hermes report from September looked at the value of ESG investing and found share prices of well governed companies performed better than those of poorly governed companies by an average of 30 basis points.
"It's a risk mitigation factor," added Bartel. "A risk measurement that can be applied. I think ESG is a measure of transparency: it's sort of knowing what you invest in and agree with the company on how they do things."
As an example of the potential of ESG investing, here are two charts which show the 12-month performance of two contrasting funds.
The first, is the USA Mutuals Vice Fund, which invests in stocks in the so-called "sin" sector: Arms, gambling, tobacco and alcohol. Over 1 year, the fund is up around 6.5 percent.