CONSCIENTIOUS ASSETS

Mixing social responsibility and investing is an ethical way of making investment choices and has takers among a niche in the investor community

- Narayan Krishnamurthy

Investing is not for just returns; there are investors who go beyond the math and invest in companies and businesses that support causes or care about the environment and governance. Environmental, social and governance (ESG) investing has existed in some form or the other for several decades, but in recent years there has been a resurgence in this type of investing. The ESG space encompasses climate change, biodiversity, health, financial inclusion, livelihood, women’s empowerment and food security, among others. As a result, ESG is at the forefront of investment decisions and the functioning of many businesses even as regulators across the world are framing guidelines for ESG investing.

WHAT IS ESG INVESTING?

Broadly speaking, ESG investing is the consideration of environmental, social and governance factors, alongside financial factors, in the investment decision-making process. But when you dwell deeper, you can understand the many subtle details that are involved in defining the ESG space. ESG includes factors that measure the sustainability of the company and how companies make money rather than just how much they make. Many factors are considered under each head—environment, social and governance (see Three Pillars of ESG