The Rise of ESG Investing
Over the past decades, the concept of Environmental, Social and Governance (ESG) investing has become a vital facet in the world of finance. ESG investing, also referred to as sustainable investing, is the process of investing in firms which are responsible stewards of the environment, depict good corporate citizenship attributes, and are led by accountable managers. This type of ethical investing strategy helps people align their investment choices with their personal values. Investors are increasingly applying these non-financial factors as part of their analysis process to identify material risks and growth opportunities.
The following three criterion are utilised to assess firms for ESG investing :
- Environment. What kind of impact does a company have on the environment? This can include a company’s carbon footprint, its abstinence from or mitigation of toxic chemicals involved in its manufacturing and other processes and its pursuit of sustainability throughout its supply chain.
- Social. How does the company improve its social impact, both within the company and in the broader community?
- Governance. How does the company’s board and management drive positive change?
Nowadays, many investors are very solicitous about the environmental and social issues, such as the impact of climate change, gender and racial inequality, data security and privacy. They want to make sure that they don’t invest in firms that exacerbate or contribute to these problems and would rather invest in those that are champions in leading ESG movements. A study conducted in 2019 by the Diligent Institute revealed that the top quintile (1 out of 5) of companies with the best governance performance within the S&P 500 had outperformed the bottom quintile by 15% over two years. Thus, investors are expressing an optimistic investment approach towards firms having a strong ESG background and projection whilst devising their investment strategy for their portfolio. The following stocks have been opted to elucidate on this investment idea:
TThe following stocks have been opted to elucidate on this investment idea:
- Microsoft
- E.ON
- STMicroelectronics
More details are available in the full Trade Idea
Barrier Reverse Convertible Autocallable | Product Snapshot
For informational purposes only. Not investment advice.
Over the past decades, the concept of Environmental, Social and Governance (ESG) investing has become a vital facet in the world of finance. ESG investing, also referred to as sustainable investing, is the process of investing in firms which are responsible stewards of the environment, depict good corporate citizenship attributes, and are led by accountable managers. This type of ethical investing strategy helps people align their investment choices with their personal values. Investors are increasingly applying these non-financial factors as part of their analysis process to identify material risks and growth opportunities.
The following three criterion are utilised to assess firms for ESG investing :
- Environment. What kind of impact does a company have on the environment? This can include a company’s carbon footprint, its abstinence from or mitigation of toxic chemicals involved in its manufacturing and other processes and its pursuit of sustainability throughout its supply chain.
- Social. How does the company improve its social impact, both within the company and in the broader community?
- Governance. How does the company’s board and management drive positive change?
Nowadays, many investors are very solicitous about the environmental and social issues, such as the impact of climate change, gender and racial inequality, data security and privacy. They want to make sure that they don’t invest in firms that exacerbate or contribute to these problems and would rather invest in those that are champions in leading ESG movements. A study conducted in 2019 by the Diligent Institute revealed that the top quintile (1 out of 5) of companies with the best governance performance within the S&P 500 had outperformed the bottom quintile by 15% over two years. Thus, investors are expressing an optimistic investment approach towards firms having a strong ESG background and projection whilst devising their investment strategy for their portfolio. The following stocks have been opted to elucidate on this investment idea:
TThe following stocks have been opted to elucidate on this investment idea:
- Microsoft
- E.ON
- STMicroelectronics
More details are available in the full Trade Idea
Barrier Reverse Convertible Autocallable | Product Snapshot
For informational purposes only. Not investment advice.