The Growth of Responsible Investing
Responsible Investing is about investing in progress and recognizing that companies solving the world’s biggest challenges may be best positioned to grow.
It is about pioneering better ways of doing business, and creating the momentum to encourage more and more people to opt in to the future we're working to create. Through the combination of traditional investment approaches with environmental, social and governance (ESG) insights, investors ranging from global institutions to individuals are taking a sustainable approach to pursuing their investment goals.
The Value of ESG
ESG insights reveal risks and opportunities not captured in traditional financial analysis and does not involve negative screening or values-based judgments about a particular security or sector. Traditionally, portfolio managers might choose to invest in companies solely based on their financial reports, looking at characteristics like earnings, profit margins and debt levels. Today, companies with strong ESG-related practices have been shown to exhibit lower risks, lower cost of capital, better operational performance and generally better share price performance over the longer term.
The impact of ESG integration is far-reaching and has the potential to add value by enhancing the long-term sustainable performance of portfolios. Good ESG, at its heart, is simply good business.
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