What is ESG Investing?

You may have heard of them, but what is ESG investing? Just another needless acronym, or something you should be getting involved with?

ESG is a good way of investing with a conscience but it can also make good economic sense too!

What does ESG stand for?

E = Environmental

This looks at how companies are making an impact on the environment, such as pollution or Energy Efficiency.

S = Social

How companies support employees and deal with customers, such as equality in the workplace, and employee rights –  Aviva Investors recently declined Deliveroo’s share offer on the back of supporting employee rights.

G = Governance

This is all about the culture & ethics of the company. How the board of directors work, its director pay structure and its financial reporting.

Socially responsible investing

Having principles makes sense, but this doesn’t have to be at the expense of a good investment return. A company that is built on strong foundations and does the right thing is much more likely to succeed long term.

Research from Make My Money Matter shows 70% of people wanted their investments to be responsible and impactful. Although only £2 of every £10 is actually invested this way!

Interestingly, the same organisation fronted by Richard Curtis responsible for Comic relief and Love Actually, stated that;

“Moving your savings to sustainable funds can be 27 times as effective at reducing your carbon footprint than eating less meat, using public transport, reducing water use, and flying less combined.”

As part of understanding your needs and aspirations your adviser should discuss your attitude to risk and any investment preferences you have at that time. This will give you an opportunity to discuss fully the facts of ESG investing.

Your adviser can then incorporate your socially responsible investing preferences into any recommendation.

How YorWealth can help

The good news is that YorWealth have investment solutions that fully subscribe to the ESG principles.

Remember all investments come with investment risk and you may get back less than you put in. Investments can fall as well as rise and you should be looking at medium to long term commitment. Any past performance of an investment is not an indication of future performance.

Want to talk about your financial future? Please get in touch with the YorWealth team.