Why sustainable Investing Matters

What are ESG factors?

What are ESG factors?

Sustainable finance considers a wide range of additional priorities, such as improving society and the environment, fostering long-term sustainable opportunities for all, and contributing to the construction of a better world, in addition to profit and returns, which may be the exclusive focus of traditional investment strategies. Many businesses are choosing to implement the ESG model, which includes these objectives.

1.Environmental  factors 

Urge investors to think about how businesses handle environmental issues like deforestation, resource depletion, waste and pollution, and greenhouse gas emissions.

2.Social factors

represent the way a business handles its relationships with its staff, customers, and the general public on matters like human rights, employee growth and treatment, stakeholder health and safety, and supply chain management.

3.Governance

focuses on a company's business ethics, accounting standards, culture, transparency, and respect for shareholder rights in order to determine how easily it might be held accountable for its actions.

Why are ESG Factors Important?

All forms of sustainability are increasingly attracting the attention of issuers and capital market investors. In 2019, HSBC conducted a survey on sustainable finance and investing, and the results showed that 94% of investors thought ESG was important.

Conclusion

As previously mentioned, a wide range of forces and factors are working together to make sustainable investing the standard rather than just the preferred option, ultimately benefiting communities and investors in the long run.