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How Green Wall Street Can Weather 2019

The new year promises serious challenges for the rapidly growing number of socially conscious investors.

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Investors looking to put their money in funds that screen for environmental, social and governance issues, or ESG, now control a whopping 25 percent of U.S. investments. Big finance firms are, understandably, paying attention. Last year saw dozens of fund launches by Vanguard, BlackRock and others, as well as central banks more focused on climate risk and new rules for “green loans.”

A new era of volatility will test the high-mindedness of investors, as well as the theory that socially responsible strategies can weather downturns better than conventional strategies. Along with the effect of overall market volatility, socially responsible investors are looking for answers to nine other big questions for the coming year.  

Is the ‘war on coal’ over?  
U.S. natural gas, which upended the energy industry over the last decade, is expected to have another good year, bringing coal’s share of power generation down to 26 percent in 2019 (it was 30 percent in 2017), according to the U.S. Energy Information Administration. While the White House is trying both to unwind Obama-era climate policies and create support for coal among industries that have already moved on, development banks are among the latest to turn away from the dirty, climate-changing fuel.

Will women win?  Eight new exchange-traded funds (ETFs) and $179 million in assets focused on gender issues were added in first three quarters of 2018. In 2019, investors are likely to broaden their focus to opportunities and products for lower- and middle-income women, said Amit Bouri, chief executive of the Global Impact Investing Network.