A central thread for ESG news, updates and thoughts.
ESG (Environmental, Social and Governance) investing refers to a class of investing that is also known as “sustainable investing.” This is an umbrella term for investments that seek positive returns and long-term impact on society, environment and the performance of the business. There are several different categories of sustainable investing. They include impact investing, socially responsible investing (SRI), ESG and values-based investing. Another school of thought puts ESG under the umbrella term of SRI. Under SRI are ethical investing, ESG investing and impact investing.
The Financial Times Lexicon defines ESG as “a generic term used in capital markets and used by investors to evaluate corporate behavior and to determine the future financial performance of companies.” It is used by investors to evaluate corporations and determine the future financial performance of companies. It adds that ESG “are a subset of non-financial performance indicators which include sustainable, ethical and corporate governance issues such as managing a company’s carbon footprint and ensuring there are systems in place to ensure accountability.” They are factors in investment considerations, used in risk assessment strategies incorporated into both investment decisions and risk management processes.
According to Environmental, Social and Governance Issues in Investing: A Guide for Investment Professionals, “There is…a lingering misperception that the body of empirical evidence shows that ESG considerations adversely affect financial performance.” It adds that, “For investment professionals, a key idea in the discussion of ESG issues is that systematically considering ESG issues will likely lead to more complete investment analyses and better-informed investment decisions.”
- ESG team at Bloomberg: Meet the Team: ESG Engineering | Tech At Bloomberg
- Betterment has an ESG portfolio: A New Idea for Fighting Climate Change: Retirement Plans! - The Atlantic
- I have never used Betterment in the US, but Endowus (SG) also supports ESG investing.