WHAT IS ESG?
ESG investing or Environmental, Social and Governance investing is a type of investment approach that uses these three criteria to assess potential companies to invest in. As a philosophy, it has become increasingly popular over the past couple of years. It has been shown that this is down to the fact people are increasingly looking to invest in options that are akin to where their values lie. By investing in good companies, you can help make the world a better place. It is far broader than just the ethical type of investment approach that was popular for many years.
Why has it gained in importance?
Recent research has pointed to over two-thirds of consumers surveyed believing that it is important to consider ESG factors before investing. This research also showed that this rises to over 70% for those with a pension. Many of these people state the reasons are to do with aligning their actions with their beliefs.
This simply means that on an individual basis we can do good through our investment choices.
Increasing amounts of research is showing that investing in companies with good ESG policies lead to better returns than investing in companies without those positive practices.
The above, together with pushes from stakeholders such as Staff, Customers and Shareholders are creating a momentum to invest in these areas and create meaningful and long-lasting change in the world.
Why are we passionate about this area?
We have always recognised and follow the importance of selecting investments with excellent track records in their respective fields. Investments in the ESG space are growing at an exponential rate. It is unlikely that change will last, unless investment returns are at least on a par with alternative, let’s say ‘less responsible’ policies.
It is our considered opinion that as a key component in making a significant advancement in the improvement of our Environment and Care for the Planet, investors and shareholders should push from within and demand a more conscientious governance from the companies they invest in. It is at this stage that good ESG policies will form part of those companies’ business plans, which will in turn filter out on how they really run their businesses. This will happen when shareholders can see the potential for improved returns by adopting these policies.
We passionately believe there can be an incredibly happy marriage between ESG investing and strong investment returns. Investors can benefit from good returns as well as adhering to their values and making a positive contribution to the world
Hear directly from Ivor in this radio interview on what this means.