Beyond the ESG hype

The acronym ‘ESG’ refers to a broad range of environmental, social and governance criteria which investors are increasingly using to analyse companies alongside traditional financial metrics. Purists may disagree, but ESG has generally come to be understood as a catch-all term for the broader theme of ethically and socially responsible investing. Typical issues that fall under the ESG umbrella include:

Environmental – carbon emissions, water and waste pollution, resource efficiency.
Social – workforce diversity, employee health and safety, community engagement.
Governance – shareholder rights, corruption, reporting transparency.