Do you have a vague idea of what ESG investments are, but still can’t wrap your head around it?
You’re not alone: A 2021 survey by Singapore-based fintech company Endowus revealed that while 93 per cent of Singaporeans are interested in ESG (environment, social and governance), only 28 per cent have taken action and built their portfolios accordingly.
Despite the ubiquity of this acronym, it is still widely misunderstood, not least because there are no global, standardised frameworks in place.
“ESG investing is an investment practice that takes into consideration the impact of investment on the environment and society at large,” explains Min Axthelm, director of Investment Research at Endowus.
“Broadly speaking, it looks at how companies treat the environment and key stakeholders from different parts of society. Subsequently, ESG investing avoids irresponsible companies and prefers companies that are responsible corporate citizens.”
ESG is not corporate social responsibility (CSR), whereby company profits are disbursed for social change. Instead, ESG is ingrained in the very ethos of the company,
