Differences With ESG
ESG is a growing global and Australian trend in investment management. It stands for Environment, Social & Governance and generally describes a fund that integrates those three factors into the investment decision making process. ESG is important when assessing the future risks and opportunities of an investment (as examples by BP and the Gulf of Mexico oil spill). The key difference between ethical investment and ESG is that ethical investment starts with a values-based decision - is this investment ethical. Once that question is answered then ethical investors will use ESG factors and traditional investment analysis to invest for performance. ESG does not include a values-based decision, it is chiefly concerned with how environmental, social and governance factors will impact the future share price. This can lead to good outcomes and change of corporate behaviour but investors should be wary not to view ESG and ethical as the same thing.
Read more about this topic: Australian Ethical Investment
Famous quotes containing the word differences:
“Quintilian [educational writer in Rome about A.D. 100] hoped that teachers would be sensitive to individual differences of temperament and ability. . . . Beating, he thought, was usually unnecessary. A teacher who had made the effort to understand his pupil’s individual needs and character could probably dispense with it: “I will content myself with saying that children are helpless and easily victimized, and that therefore no one should be given unlimited power over them.””
—C. John Sommerville (20th century)