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Sustainability Matters

It's Been a Rough Start to 2022 for Sustainable Investing Stock Strategies

As energy stocks surged and tech tumbled, sustainable portfolios had a tough quarter.

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Sustainable investing strategies got hit with a one-two punch in the first quarter, largely missing out on the energy-stock rally and taking losses from their big weightings of sliding technology stocks.

The Morningstar U.S. Sustainability Index lost 6.9% in the first quarter, trailing the Morningstar U.S. Market Index by about 1.5 percentage points. The Morningstar U.S. Sustainability Leaders Index—a collection of the 50 U.S. large-cap stocks with the best sustainability scores—fell even further, ending the quarter down 10.6%. Globally and across all markets, 13 of 66 Morningstar’s sustainability-screened indexes beat their conventional market equivalents during the first quarter. That’s down from 31 of 66 beating non-ESG indexes in 2021.

Lauren Solberg does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.