12th May 2021

What is ESG Investing?

Have you ever thought about ethical or ESG investing? Have you heard of these terms and not known quite what they are? Don't worry, here at DAM we have you covered with a basic breakdown. 

 

Ethical investing or ESG are often user interchangeably within the industry- however they are essentially one in the same. ESG is acronym for Environmental, Social and Governance- these are non-financial factors which are considered in the investment decision. The overall premise is that an investor will choose stocks that align with their ESG values and/or avoid stocks that don't.

Environmental captures funds that largely promote sustainability, renewable energy, eco-friendly projects etc. Social captures funds that largely promote issues such as (but not limited to), diversity in the workplace, ethical supply chains, transparent working procedures etc. Lastly, Governance captures how organisations are managed from the top down, including their decision-making processes and the workplace culture embedded within the company. 

It is worth noting that there is no standardised approach in calculating what constitutes ethical governance or socially responsible and eco-friendly behaviour- and so the factors may differ from investor to investor. 

If you think ESG investing might be something you are interested in or if you want to find out more information about it- you can contact us directly at info@damgoodpensions.com