ESG as an Investment Strategy
by StaffIASA
Marketing Communications,—
Environmental, Social, and Governance (ESG) is a guiding framework that investors can use, in addition to financial, during the decision-making process. An ESG approach to investing, which also is referred to as sustainable investing or socially responsible investing, looks beyond the numbers (quantitative) to consider more qualitative considerations, including organizational or individual morals and beliefs and/or social and environmental benefits, to make smart investment decisions for the greatest returns.
By looking beyond the data, investors can ensure their investment matches their organizational culture and/or personal worldview. Considering ESG in investment decisions can reduce risk, increase opportunities, and enhance long-term returns. In addition to potential positive financial returns, ESG-based investments can result in positive social and environmental benefits and affect positive change in the industry and communities. If an investment can do so much more than result in a net return on investment, it’s a win-win.