ESG has become a popular shorthand for all the non-financial issues that affect business and investor success. It stands for ‘environmental, social and governance’ and represents a range of criteria companies use to help run themselves responsibly – and report the outcomes of their ESG practices to investors and others.
Investors also use the term ESG often. For example, an ESG stock is a share in a company that meets certain environmental, social and governance criteria. An ESG fund or exchange-traded fund (ETF) invests in many such stocks collectively.
St. James’s Place is committed to integrating ESG considerations into investment decision making. We measure and monitor the companies in which our fund managers invest, drawing on ESG criteria, to ensure we are using money as a force for good.
It also helps us identify a wide range of risks and opportunities that could affect companies’ share prices and long-term sustainability.
Fund manager Polina Kurdyavko of BlueBay says: “We believe incorporating ESG factors can provide a more robust and holistic approach to investment management, as well as enable us to meet client needs.” Alistair Thompson of First State Investments considers it “prudent risk management and a fundamental part of our obligations to clients. To us, sustainability is not just a label, but a set of values by which we operate.”