ESG stocks are listed companies that put emphasis on environmental, social and governance issues when making business decisions. A key reason for a company wanting to focus on ESG is due to the increasing assumption that the overall financial performance of a company is becoming more impacted by environmental and social implications.
ESG factors are the standards a company needs to meet in order to be considered a sustainable business. However, it is worth noting there is currently no globally recognised list of standards. Therefore, investors or a company’s stance on what is measured to be ethical can naturally vary.
Below are some example ESG factors we have highlighted that are guidelines as to what could fall under environment, social and governance:
Broker research can be a useful way for getting an understanding of how a company is progressing and performing. You can discover and read detailed broker research notes about ESG focused companies HERE on Research Tree.
We have witnessed a noticeable increase in ESG stock investing globally. The pandemic has encouraged and further driven this trend, mostly due to market disturbances which has led both institutional and retail investors to turn to ESG stocks for improved resilience. Investors and companies are progressively realising the links between social, environmental, and economic issues, and ultimately how these categories can impact the overall financial performance.
