5.

Sustainable Investing: The Rise of ESG Factors

Sustainable investing has gained traction over recent years, with an increasing number of
investors considering environmental, social, and governance (ESG) factors when making
investment decisions. This trend reflects a growing recognition that these factors can
significantly influence financial returns and risk profiles.

Environmental criteria consider how a company performs as a steward of nature. Social

criteria examine how it manages relationships with employees, suppliers, customers, and the
communities where it operates. Governance deals with a company’s leadership, executive pay,
audits, internal controls, and shareholder rights.

Investors are increasingly aware that companies with strong ESG credentials are often better
positioned to generate sustainable profits and long-term value. This shift is not just about
ethics but also about economics. Companies that neglect ESG criteria may face risks like
regulatory fines, reputational damage, and operational disruptions, which can affect their
financial outcomes.