Environmental: How companies and industries manage their impact on the environment. This could include climate change, deforestation, pollution and waste management.
Social: How a company or industry manages its impact on society. This could include how they treat employees and suppliers, community engagement and health and safety.
Governance: Whether a company has good business practices. These could include the diversity of a company’s board and leadership team, executive pay or how they handle tax.
When discussing the broader ESG investment landscape there are a variety of approaches to choose from, some having very different objectives. The five approaches to ESG investing described below are a useful starting point to understand the options available.