With ESG investing growing in popularity, ausbiz goes beyond the climate news headlines to help Australian shareholders understand how ESG considerations impact their investment opportunities and returns.
What is ESG investing?
The term ESG investing is often used interchangeably with ‘green investing’, ‘impact investing’ and ‘socially responsible’ investing - but at its core, it means prioritising environmental, social and governance outcomes as part of the investment process. Investors use ESG considerations to identify both material risks and growth opportunities.
Why ESG matters
The world is challenged by climate news dominated by global warming, extreme weather conditions and declining biodiversity. The coronavirus pandemic has increased the emphasis being placed on corporate social responsibility, and high profile examples of corporate governance failures continue to negatively impact investor confidence.
In response, some of the world’s largest investors are embracing ESG and agitating for change within corporations that fail to identify and respond to climate, social and governance issues in a meaningful way.
Across all sectors, ESG considerations are increasingly dictating the terms of engagement between prominent investors and boards, as well as investment decisions. In addition, governments, central banks, and global governing bodies, including the IMF, recognise the role of monetary and fiscal policy in addressing the challenges of climate change.
Is ESG a fad?
While ESG investing has become increasingly popular over the past decade as climate change news dominates much of the global discussion about the environment, its current growth is being driven in large part by millennials and women.
Global fund managers such as Blackrock, Vanguard and Fidelity International have embraced ESG investing and are driving the sustainability charge in boardrooms across the globe. ETP/ETFs offer exposure to ESG investment opportunities, and investment opportunities with ESG overlays are now applied by almost all professional investors and fund managers.
ESG on ausbiz
ausbiz examines ESG through many lenses. For us, it’s not only a conversation about what not to invest in; instead, we speak with ESG experts and investors in Australia and around the globe to uncover opportunities across all sectors, including tech, mining, renewable energy and across all asset classes.
The ausbiz team also discusses EST risk and returns with business leaders and policymakers, helping you form views to make informed decisions suitable for your investment horizon.
Don’t play catch-up. Sign-up to ausbiz or download the app for the latest ESG news and investing ideas brought to you by the experts, anytime and anywhere. Live. On Demand. Free.
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