One reason for the outperformance in the emerging markets ESG strategy is that "companies that have low labor standards may have high litigation costs," said Asha Mehta, portfolio manager and director of responsible investing at Acadian Asset Management, which has $70 billion in assets under management.
However, not all companies may provide the same level of disclosure about labor standards. The majority of respondents to the RBC survey, or 43 percent, said they were either somewhat dissatisfied or completely dissatisfied with the amount and quality of ESG-related information companies reported.
Ben Yeoh, senior portfolio manager at RBC Global Asset Management, said academic research in the area is slowly growing, and it's pointing to benefits for investors. "Regardless of the politics … companies doing these things will benefit over the long term," he said.
As with any change in party leadership, the Republican sweep of the White House and Congress has renewed interest in topics such as renewable energy, a trend that's likely to translate into investor interest.
"If anything, the election outcome has increased the demand for ESG investing as investors look to fill a potential void from public policy," said Casey Clark, vice president of investment strategy at wealth management firm Glenmede. "Corporations are reacting to investor demand when it comes to" responsible investing.
I think this will become more and more mainstream as there's more data," Clark said. "I believe this is a long-term trend, only going to grow from here."