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What is ESG investing?

Emma Wall explains how environmental, social and governance concerns are factored into stock selection.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

  • ESG stands for environmental, social and governance
  • ESG investing is a type of risk management
  • ESG risks can eat into a company’s revenues and profits

Read transcript

ESG investing is investing with environmental, social and governance issues in mind. ESG investing is really just risk management, and you want to try and avoid risks when making stock selection. Scandal, fines, or a company falling from favour can impact the revenues, profits and share price of that company; therefore meaning fewer returns for you to take home. Environmental issues may surface because a company is kicking out loads of carbon emissions into the atmosphere and ending up with significant fines which will then impact the bottom line. Social issues may arise because a company is not paying its staff properly and if that hits the headlines the company's in trouble. And governance? Well governance is just running a company properly and you don't want to invest in a badly run company.


This video is not personal advice or a recommendation to invest. If you're unsure about the suitability of an investment please seek advice. All investments can fall as well as rise in value, so you could get back less than you invest.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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