Investment Banking MC
ESG: Actively driving change
InvestorDaily
Environmental, social and governance investing is in vogue globally, but there seems to be a particular fascination for it in Australia. Speaking at the recent Aberdeen Standard Investments Changing Investment World forum in Sydney, ASI’s global head of stewardship and ESG investment Euan Stirling noted that despite the variety of ESG interpretations in the market, actively changing companies for the better should be at its core.
What is ESG investing?
ESG investing acquired some inaccurate associations with non-financial issues during its early days, according to Mr Stirling.
“Many people perceived ESG investing to be about hugging trees and making daisy chains. This is absolutely not the case. When ESG risks begin to bite, they become very financial. And they do that very quickly,” he said.
While some see the primary focus of ESG being ethical investing, again, this was not Mr Stirling’s view. While he does support stock selection within ethical funds, he believed ESG investing to be about much more than that.
“It is about creating the right long-term outcomes for our clients through the prism of environmental, social and governance considerations. For example, if we invest in a business that is exploiting workers and treating them poorly, then returns will simply not be sustainable. The same for a business that produces toxic emissions.
The rest of this article can be found at investordaily.com.au.
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