ESG vs conventional returns.

ESG (Environmental, Social, Governance) portfolios often charge 0.1-0.3% premium over conventional index funds. Long-term return data mixed: some studies show ESG matches or slightly outperforms; others show modest underperformance. This tool compares ESG vs conventional projection over time.

100k portfolio, ESG return 7%, conventional 7.5%, ESG fee premium 0.2%, 10 years. ESG net return: 6.8% × 10y = future value 193k. Conventional: 7.5% × 10y = 206k. ESG underperforms by 13k (6.3%). Modest cost for value alignment if that matters to investor.

ESG performance debate: 2018-2021 ESG outperformed (tech-heavy ESG indexes captured Big Tech gains). 2022-2023 ESG underperformed (excluded oil/defense which boomed). Long-term: ESG and conventional roughly equivalent. Pick ESG for value alignment, not pure return optimization. Costs matter most: low-fee ESG (0.10-0.20%) competitive; expensive active ESG (0.50%+) drags returns.

A worked example

Try the defaults: portfolio value of 100,000, esg return of 7%, conventional return of 7.5%, esg fee premium of 0.2%. The tool returns -13,034.17. You can adjust any input and the result updates as you type — no submit button, no reload. That's the real power here: seeing how sensitive the output is to one or two assumptions.

What moves the number most

The result responds to Portfolio Value, ESG Return %, Conventional Return %, ESG Fee Premium %, and Years. The rate and the time horizon usually dominate — compounding means a small change in either reshapes the final figure more than a similar shift in contribution size. Test this by doubling one input at a time.

The formula behind this

ESG net return = ESG % - fee premium. ESG FV = portfolio × (1 + net)^years. Conventional FV similarly. Difference = ESG FV - conventional FV. Everything the calculator does is shown in the formula box below, so you can check the math against your own spreadsheet if you want.

Why investors run this

Most people's intuition for compounding is wrong — not because the math is hard, but because linear thinking doesn't account for curves. Running numbers through a calculator like this one is the cheapest way to recalibrate that intuition before making an irreversible decision about contribution rate, asset mix, or retirement age.

What this doesn't capture

Steady-rate math ignores real-world volatility. Actual returns are lumpy; sequence-of-returns risk matters most in drawdown; fees and taxes drag on compound growth; and behaviour changes in drawdowns can reduce outcomes below the projection. Treat the number as one scenario, not a forecast.