A new report by MSCI said that bonds with higher ESG ratings outperformed the full bond market in Q1. The report suggests that highly rated ESG bonds can weather difficult economic challenges like the one we face today.

The news complements a report from Zacks last week that showed that ESG ETFs were largely unscathed during this period.

ESG Bonds in the First Quarter

According to MSCI, the USD IG ESG Leaders Corporate Bond Index beat the performance of its parent index the MSCI USD IG Corporate Bond Index in total and excess returns, respectively.

“From an ESG perspective, this was a real first stress test for our corporate bond ESG indices,” MSCI factor strategist Hitendra Varsani told IFR. “It is not just fundamentally that quality outperformed, but also those that have much stronger ESG characteristics also outperformed.”

The outperformance comes at a difficult time for the U.S. economy. However, the crisis has recently spawned COVID-19 social bonds, which fit in the ESG category. The sector has been seen as a way to get capital to hospitals, small businesses, and other needy individuals who need financing. Barron’s reported this weekend that

Finally, Sustainalytics says that the total global issuance for social bonds in 2019 hit $13 billion. Sustainability bonds hit $40 billion, while green bonds hit $257 billion.

Related: ESG: MSCI Chief Fernandez Warns ESG is a “Permanent Change in the Way Capitalism Works”