Responsible investing is an investment strategy that seeks to generate both financial return and social good, or a positive impact on society and the environment. This approach to investing considers not only financial returns but also environmental, social, and governance (ESG) factors.
Responsible investing is based on the belief that ESG factors play a crucial role in the long-term performance of investment portfolios. Investors integrate ESG criteria into their investment analyses and decision-making processes, believing that these factors can affect an asset's value and thus are essential to assessing the asset's overall risk and return profile.
Investors also engage with their portfolio companies to influence their behaviors and practices, encouraging them to improve their environmental impact, social contributions, and governance practices.
Beyond achieving financial returns, responsible investing aims to contribute positively to society and the environment through investments that promote ethical practices, environmental stewardship, and social well-being.
ESG factors can pose significant financial risks to investments. By considering these factors, investors can avoid companies with poor governance structures, environmental violations, or social controversies that may lead to legal troubles and reputational damage.
Responsible investing also aids in changing business practices, by funding projects that have positive social and environmental impacts. This approach allows investors to align their portfolios with their ethical values and beliefs, contributing to a sense of personal fulfillment and social responsibility.
Keslio is an international sustainability advisory that helps companies and investors navigate their sustainability journey. We support our clients through various services, such as strategy development and implementation, reporting and communications, and greenhouse gas emissions calculations.
We’re passionate about supporting business leaders and their companies with sustainability and ESG and we’d love to help you. To talk to us and find out what Keslio can do for you, please use the section below to contact us, or email us at hello@keslio.com.
