Question

Do you think investors should be concerned with ESG?

Answer 1

Investors should actually show a concern with environmental, social and governance (ESG). Referring to the company’s investments & its repercussions on the environment and social aspects of our world, under ESG Investors should be concerned with preserving the nature, where we to deal with resources we survive upon and live the rest of our lives there in. ESG investments are simply investments into companies with much of their resources being contributed towards preserving the earth and for the good of humanity. ESG investments may result in a financial impact in their efforts to do this, as in vehicle manufacturing companies, that buy parts that are twice as expensive, but they are manufactured in a more ESG friendly manner. The importance of an ESG Entity or unit is likely to get better than non-ESG companies due to the fact that ESG is for the good of humanity. Saving money and capitalizing on investment returns should always be top priority, and ESG investing replicates the same. Companies have a sustainability-based approach to their businesses are more profitable over time and deliver better returns to their shareholders implementing the ESG.
ESG investing has grown by more than 97% globally in the past 20 years, and the number has gone from tens of billions to hundreds of trillion dollars, the number of investment funds has increased from 10s to 1000s. ESG investment funds will continue to rise, so the need for asset managers. For an Investor the first step of identifying these ‘well managed companies’ is integrating ESG-factors in a financial analysis. The investor should also understand how the asset managers apply ESG factors in their own analysis. Also, it is not enough to focus on the risk alone, an investor also requires to identify the opportunities relating to ESG.