What is ESG-Investing?

ESG investing stands for Environmental, Social, and Governance investing, it's an investment approach that takes into account the environmental, social, and governance performance of companies in addition to their financial performance. It is a holistic approach that aims to assess a company's overall sustainability and impact on society and the planet, as well as its governance practices.

ESG investing is based on the belief that companies with strong environmental, social and governance (ESG) performance are likely to have better long-term financial performance and be less risky than those with weak ESG performance. Companies with good ESG performance are generally considered to have better management, lower costs, and less risk of reputational damage, and legal and regulatory issues.

ESG investors look at a variety of data to assess a company's ESG performance. This data can include information on a company's carbon emissions, labor practices, safety record, and community engagement, as well as its management and governance practices. They use this information to evaluate a company's overall sustainability and impact on society and the planet, as well as its governance practices.

ESG investing has been growing rapidly in popularity in recent years, as more investors become interested in aligning their investments with their values and as companies have come under increasing pressure to improve their environmental and social performance. As a result, more financial products and indices have been created to allow investors to more easily invest in companies that meet certain ESG criteria.

It's worth mentioning that ESG investing can be implemented in different ways, for example through exclusionary or positive screening, and investors can also use different tools like ESG scores, company engagement and proxy voting.