A Sustainable Strategy for Sustainable Investing

Abstract

The hottest dot in asset management right now is not private equity or factor investing; it’s ESG. ESG investing— investing that takes into consideration the environmental, societal, and internal governance impact of an investment—goes by many names: sustainable investing, impact investing, and socially responsible investing to name just three. It rests on two assumptions: first, that an enterprise can profit and grow by advancing the state of the environment, the welfare of all its stakeholders, and the effectiveness of its corporate governance; and second, that the stock market will reward such enterprises.