Investment strategies differ, and this is why an investor or fund manager will identify various strategies and then determine how each one can be applied to specific market conditions.
This is where ESG (environmental, social and governance) investments caught my eye. ESG is an investment class that falls under the banner of “sustainable investments”. Briefly, ESG is an investment strategy that evaluates a company’s corporate actions with the aim of determining the company’s future financial performance. It includes aspects such as ethical and corporate governance issues, the management of a company’s carbon footprint on the environment, and making sure that there are systems in place to ensure a sense of responsibility. There are certain ESG issues that can be incorporated into such an investment strategy.
Why an ESG investment strategy?
Many investors are not interested anymore in only the financial return on their investments. They are also interested in the impact of their investments and the role that investments can play in support of global issues such as, among others, climate change.
A recent study indicated that millennials are more likely to trust a company or buy the products of such a company if the company has a reputation of being socially or environmentally responsible.
How are a company’s ESG scores determined?
Denne historien er fra 18 February 2021-utgaven av Finweek English.
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Denne historien er fra 18 February 2021-utgaven av Finweek English.
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