What is ESG Investing – part 1

ESG stands for Environmental, social and governance.

In recent years, ESG criteria are of increasing interest to companies, their investors and other stakeholders. These standards are the central factors that measure the ethical impact and sustainability of investment in a company. With increasing awareness of global warming, carbon emission and sustainability; concerns about the ethical status of quoted companies also follow.

ESG investing is an investment strategy where the investor considers the environmental, social and governance factors of a company prior to investing.

More and more investors are not only looking for returns but also the impact of their investing. Hence, companies that act with accountability in addressing the impact of their business on the world; are garnering more attention.  For investors, ESG could mean investing in socially responsible funds or organisations; which in turn translates to investing in a better future.

Due to this trend, green stocks, green bonds, green funds are gaining popularity. 

ESG investing provides a way for investors to align their values with the company’s and in doing so, have an influence on the future of the world.  The rising popularity of investing in a socially and environmentally conscious way has created more demand and thus more ESG investment options to choose from.

As with any investment types, investors should do their own research for each investment product they are considering.

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