ESG: Strategy committed to the environment

Normally when investing in equities, the first thing that anyone thinks of is the word “risk”, this is because the equity market is very volatile, so, in uncertain periods, it would seem that the most appropriate thing to do is to invest in a conservative strategy. However, something that the equity market can offer is that the longer the investment period, the higher the return that could be obtained, since historically this market and the trends of the main Stock Exchanges are usually positive.

This is one of the reasons why it continues to be very interesting, but it also increases the needs of the investor who evolves in the markets showing an appetite for better investment options that add profitability, and concerns about the environmental impact of a company and the commitment that it has with the society in which it operates, called “Sustainable Investment”.

Sustainable investment takes into account relevant environmental and social issues when making investments. And it is that, through some studies and historical behavior, it has been shown that Sustainable Investment provides profitability, helps reduce risks and allows more complete investment decisions to be made.

According to Robeco, international fund manager and pioneer in sustainable products, it points out that sustainable investment is the investment discipline that takes into account environmental, social and corporate governance criteria (ASG for its acronym in Spanish and ESG for its acronym in English) with the aim of achieving competitive long-term financial returns and a positive social impact. It is also known as “Responsible Investment”.

To align this type of investment and follow up on it, international organizations have become involved and recommend a series of principles and standards to promote Sustainable Investment, such as the United Nations Global Compact, which is a voluntary corporate strategic policy initiative for companies that are committed to aligning their operations and strategies with the ten universally accepted principles in the areas of human rights, labor standards, the environment and anti-corruption.

There are currently several ESG products. For a product to invest sustainably with ESG criteria, there are various methods, such as ESG integration, best-in-class approaches, thematic investing, impact investing, and company exclusion. that do not act in accordance with the principles, combined with the awarding of an ESG score to each company, depending on the sector and industry.

Investing in sustainable companies is gaining more and more strength when creating investment portfolios and more than a strategy, it is becoming a necessity to have a better future, it invites companies to commit to the environment, social value and demonstrate that have good corporate governance with scope that transcends the business.

Whenever you want to make an investment, it is important to approach the specialists, who will know how to guide their clients according to their expectations and the behavior of the markets. As investors, it remains to focus on contributing to the environment, not only in individual actions, but also through savings, with a sustainable and responsible investment.

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