What is ESG investing?

For the ‘environmental’ part of the ESG factors, we examine the positive contribution a company makes in terms of environmental challenges and its performance in this regard. We look at the steps a company is taking to reduce carbon emissions, water usage and the amount of waste generated. We also ask questions like ‘Does the company actively recycle?’ and ‘Does the company report on its own environmental impact?’.

For the ‘social’ aspect we look at how a company treats its employees. Does a company ensure working conditions are safe and pay its employees a fair wage ? Does the company have an anti-discrimination policy, for example? How does the company treat its suppliers? What is the company doing to exclude child labour from its manufacturing chain?

For the ‘governance’ aspect we examine how a company is managed, asking questions like ‘Is the company susceptible to corruption?’ and ‘What is the composition of the Supervisory Board?’. We also look into whether the company is involved in political lobbying and, if so, whether they have a transparent policy about this. And we consider how transparent the company is in terms of its policy and activities.