ESG investing requires true transparency and recognition that it's not a one-size-fits-all approach

IN recent years, the investment industry has undergone a fundamental change in the way it approaches responsible investment. What is needed now is true transparency and a recognition that environmental, social and governance-focused investments (ESG funds) are not a homogeneous product.

Only a few years ago, responsible investment was considered a niche activity, a European phenomenon. Some argued it undermined fiduciary duty. Many were convinced it inherently resulted in lower returns.

How times have changed. Investors around the world - institutional and individual - are now concerned about issues that go beyond the balance sheet. The current environment is accelerating the trend. For instance, just recently the UK announced plans to launch the first green gilts and require climate risk disclosures from corporates, as it moves towards a net-zero economy.