ESG investing is a form of socially responsible investing that seeks to prioritize environmental, social, and governance factors, alongside financial returns, in investment decision-making.
At the core of ESG investing stands the notion that creating value for all stakeholders will drive stronger returns. This is not a short-term strategy for immediate returns, but rather a long-term investment in people, the environment, and the governing structure behind decision-making.
Demand for ESG investing has soared in recent years, and ESG factors are increasingly being embedded into every part of the investment process. Referring to these factors allows investors to make more informed and conscious decisions when screening investments and companies. Investors can also evaluate the way they do business and ensure their business operations are geared toward the future.
Each individual letter (E, S, G) stands for an area of focus when evaluating a firm, a fund, or a portfolio. Explore the drop down to find out more about each aspect of ESG investing.