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Aligning investments with values

The adoption of ESG investing has accelerated as more investors seek out investments that reflect not only their financial goals but their personal values too.

ESG: Moving to the mainstream

ESG is no longer niche. Many companies now consider ESG matters to be at the heart of the sustainability of their business strategy and operational activities. It is a significant and growing part of the global finance sector.

 

A combination of factors has contributed to the advancement of ESG to the mainstream investing landscape:

Transparency and standardisation of ESG data is improving. There are now more than 11,000 public companies worldwide disclosing ESG indicators.
Global regulatory change is driving increased adoption of ESG products by larger institutional investors. Regions like Australia where regulation has developed have seen increased ESG product adoption and growth.
Investors are increasingly seeking social utility, or for their investments to align with their values, in addition to financial returns.
Research shows everyday investors - but millennials and women, in particular - view social and environmental impacts as important to their investing choices.
Investors want social utility in addition to financial returns on their investments. Recent studies show ESG having a neutral-to-positive impact on company performance. There are growing bodies of research that conclude ESG investing can achieve competitive rates of return.

What is Vanguard's approach to ESG? With more than 30 million investors globally, we think about risks and opportunities in ESG in the context of delivering long-term value to investors.

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ESG considerations are integrated into product design and investment processes across our funds.

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Vanguard takes seriously its responsibility to represents the interests of more than 30 million people who invest in Vanguard funds.

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Vanguard's Investment Stewardship team actively engages with portfolio companies and their boards to discuss material risks, ranging from business and operational risks to environmental and social risks. Read our latest report.

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