Environmental, social, and governance (ESG) investors were once perceived as an element of activist communities working to influence distinct aspects of company behavior. Over time, the focus of ESG investors has broadened as institutional investors have identified ESG topics as issues that impact company performance and value. In fact, according to the Global Sustainable Investment Alliance, there has been a 25% increase in assets managed under responsible investment strategies for a total pot of $22.89 trillion since 2014.
Manufacturing sector activity, as measured by the Federal Reserve Board’s industrial production index, grew by just 2.3% in 2013, down from 3.9% in 2012. Activity in the fourth quarter, however, grew at an annualized rate of 6.2%. Despite relatively slow growth, various benchmarks indicate that the manufacturing sector’s overall financial performance in the third quarter of 2013 improved on a year-over-year basis and is vastly better than it was during the contraction as the Great Recession took hold. If, as MAPI forecasts, manufacturing activity grows at a faster rate in 2014 and 2015, the solid financial performance of the past year should continue.