On July 11, 2018 Forbes published a thought piece by George Kell, Chairman of Arabesque and Founding Director of the United Nations Global Compact.
In a well-written essay – accompanied by attractive infographics – Mr. Kell charts the development of environmental, social and governance (ESG) investing.
“The term ESG was first coined in 2005 in a landmark study entitled “Who Cares Wins.” Today, ESG investing is estimated at over $20 trillion in AUM or around a quarter of all professionally managed assets around the world, and its rapid growth builds on the Socially Responsible Investment (SRI) movement that has been around much longer. But unlike SRI, which is based on ethical and moral criteria and uses mostly negative screens, such as not investing in alcohol, tobacco or firearms, ESG investing is based on the assumption that ESG factors have financial relevance. In 2018, thousands of professionals from around the world hold the job title “ESG Analyst” and ESG investing is the subject of news articles in the financial pages of the world’s leading newspapers. Many investors recognize that ESG information about corporations is vital to understand corporate purpose, strategy and management quality of companies. It is now, quite literally, big business.”
The essay describes the key forces driving the market and major players in ESG investing, presents data on performance and explains why ESG is important – to corporations, individuals, investors and policy makers.
You may read the essay on the Forbes internet site.