ESG Investments Perform Just Fine, Says Aaron Wealth Founder

The diversity of the group speaks to their mission, whose first board meeting is in early August, and all have worked in SRI "in their various worlds," Hirschberg says.

For example, Venable of Addepar, a technology company that offers an integrated financial software platform, is a Goldman alum who used to work for Sorenson Impact Center, one of the largest family offices in the United States that focuses almost exclusively on sustainable investing. Morrow sat on the Presbyterian Church's national impact investing committee, as well as has the added connection of being Hirschberg's college roommate while they were at Georgetown University.

Informal meetings this group already has had, Hirschberg says, were "amazing to watch them interact and have conversations and debates about what's impact and what's not. What kind of trends they are seeing and what kind of funds and kinds of investment opportunities they see … this group will be really good in [determining whether] a particular investment should or shouldn't go on our platform, not from an investment perspective, but an impact perspective."

The idea that sustainable portfolios don't perform at the level of broader market portfolios is an "old wives' tale," Hirschberg says. "It's a big myth that in order to do good you have to give up return," he says. "The reality is the last couple years most index funds — depending on what ESG lens you look at — have actually outperformed the broader market."

He adds that the growth of ESG — the Global Sustainable Investment Alliance estimates the amount of money invested in impact globally is close to $31 trillion — changes performance numbers from when there were far fewer options 15 years ago. Today, he says, studies show that the worst impact investing returns are even with S&P 500 performance.

Hirschberg agrees that there are some groups out there that just use the term "green" or "ESG" for marketing, "but that's not what we're talking about [at Aaron Wealth]," he says. "That's not the movement that is happening. Rather [we] believe that sustainable investing will become the norm, not the exception, because [those funds] will have better returns [because] better run companies will outperform."

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• Global Impact Investments Show Healthy Growth: Study