The past few years have witnessed a surge in the popularity and momentum of environmental, social and governance (ESG) investing — a form of responsible investing that aligns financial returns with positive environmental and social ones.
Institutional investors and asset managers have been viewing ESG investing as a means to mitigate investment risks and increase long-term returns. The basic premise is that industries that effectively manage their environment, social and government-related risks will be less susceptible to changes in regulations or societal expectations. This will improve their performance over the long term.
