From Morningstar: 2025-04-24 05:13:00

Market volatility due to President Trump’s tariff policy tested sustainable investment strategies. Morningstar compared the performance of sustainability indexes to broad market indexes. The Morningstar Global Markets Sustainability Index outperformed the Morningstar Global Markets Index, especially in the US. Short-term performance showed idiosyncratic factors played a role. Sustainable investors are focusing on long-term strategies to address climate change and inequality amidst policy changes under the Trump administration. The US withdrawal from the Paris Accords and opposition to climate initiatives hinder global efforts to reduce greenhouse gas emissions. However, market forces are pushing for a global energy transition, with 41% of global electricity generated from low-carbon sources in 2024 and solar generation growing by 29%.

Despite the global push for sustainability, enacted tariffs could disrupt trade and supply chains, impacting corporate investments and emissions reporting. Economists predict that US tariffs will slow growth and generate inflation, while Europe invests more in defense. This shift may lead European investors to reconsider avoiding investments in weapons manufacturers.

Investors face challenges in reacting to short-term market changes and long-term trends. The Trump administration’s tariff policies and climate initiatives could negatively impact equity markets. However, investors can address climate risks by allocating assets to funds that support climate solutions and engage with companies to advance decarbonization efforts.



Read more at Morningstar: As Markets Lurched, Sustainable Stock Indexes…