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The Rise of ESG Investing
Traditional investing delivers value by translating investor capital into investment opportunities that carry risks commensurate with expected returns. Sustainable investing delivers value by balancing traditional investing with environmental, social, and governance-related (ESG) insights to improve long-term outcomes.
Sustainable investing can be seen as part of the evolution of investing. There is a growing recognition among industry participants that some ESG factors are economic factors, especially in the long term, and it is, therefore, important to incorporate material ESG factors.
ESG factors include:
Environmental
(Conservation of the Natural World)
Environmental
(Conservation of the Natural World)
- Climate change and carbon emissions
- Air and water pollution
- Biodiversity
- Deforestation
- Energy efficiency
- Waste management
- Water scarcity
Social
(Consideration for People and Relationships)
Social
(Consideration for People and Relationships)
- Customer satisfaction
- Data protection and privacy
- Gender and diversity
- Employee engagement
- Community relations
- Human rights
- Labor standards
Governance
(Standards for Running a Company)
Governance
(Standards for Running a Company)
- Board composition
- Audit committee structure
- Bribery and corruption
- Executive compensation
- Lobbying
- Political contributions
- Whistleblower schemes
