What is sustainable investing?
Author: Sound Choices
April 22, 2019
Sustainable investing or responsible investing refers to investment strategies that consider environmental, social and governance (ESG) issues as part of the investment decision-making process.
In contrast, traditional investment strategies have limited or no focus on incorporating ESG factors into the investment process.
Interest in responsible or sustainable investing has increased substantially over the last decade around the world and across all audiences, from individual, retail investors to the largest institutions. Global responsible investment strategy assets now total more than US$30 trillion, an increase of 34% since 2016.1
What is ESG?
ESG refers to environmental, social and governance issues that are taken into consideration when making investment decisions. Integrating ESG factors into investment processes can help identify key risk and return drivers in portfolios:
Environmental: Impact on the environment, which can include water usage, pollution, waste management, energy efficiency, gas emissions and climate change.
Social: Human rights, health and safety, employee working conditions, community impact, diversity, population and demographics change, consumption patterns and shareholder reputation.
Governance: Board independence and diversity of board members, alignment of shareholders and executives, compensation, shareholders rights, transparency / disclosures and business ethics/culture.
In response to increasing interest, a wide spectrum of sustainable investing approaches and products have developed, ranging from mainstream investment management teams beginning to consider environmental, social and governance (ESG) issues as part of their investment processes to highly specialized 100% impact groups:
AGF is a leader in the development of sustainable investing. To find out how AGF integrates ESG into our investment decision-making and ownership practices, visit the Investment Stewardship page on AGF.com.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.
For further information, please visit AGF.com.
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