Despite the backlash, ESG is here to stay

CRITIQUES of environmental, social, and governance (ESG) considerations in investing have increased significantly over recent months. This attention and pushback are, if anything, evidence of how much traction responsible investment has gained, and perhaps of a maturing of the sector. But at the same time this has understandably also raised questions among investors, and while ESG incorporation is not new, many are new to it.

Some investors may be wondering whether to continue embracing ESG incorporation when it is receiving so much negative scrutiny. So should they? The answer is, without question, yes.

ESG incorporation is about considering information that can be material to the value of investments, and ESG investing practices are largely driven by investor needs. As such, ESG factors are not separate from fundamental investment analysis; they represent a natural evolution in the data that is available to – and considered by – investors in their decision making.