In investment management, what does sustainability refer to?

Sustainability in investment management refers specifically to the consideration of ESG factors—Environmental, Social, and Governance—when making investment decisions. This approach goes beyond merely seeking high returns or assessing financial metrics; it integrates the long-term impacts of investments on society and the environment.

By focusing on ESG factors, investors aim to promote sustainable practices within companies and industries, ultimately leading to more robust and resilient markets. This consideration helps ensure that investments contribute positively to the world while still pursuing financial performance. Recognizing the multifaceted nature of sustainability, many investors believe that by considering ESG factors, they can achieve better risk management and uncover new opportunities in a changing global landscape.

This understanding aligns with the growing trend among investors to favor companies that not only deliver financial returns but also commit to sustainable practices, acknowledging that these factors can influence long-term profitability and viability.