Sustainability has become a prime concern in today’s world. Owing to this, companies are coming forward with new ways to improve sustainability and contribute to organizations that strive to solve social and environmental issues. Sustainable investing encourages investors to invest in such companies.
Under sustainable investing, there are various frameworks, such as socially responsible investing, economic, social, and governance investing, and impact investing. Of these frameworks, we can take a closer look at economic, social, and governance investing, also known as ESG.
To answer the question of what is ESG investing, we need to understand the goal of sustainable investing. Sustainable investing means investing in companies and organizations that work towards solving environmental and social issues. Under sustainable investment, the investors look for an opportunity to invest responsibly, generating a good return. To achieve it, the investors evaluate companies based on environmental, social, and governance factors.
Know more about ESG investing and how it works
ESG investing is popular among investors who seek to contribute toward sustainability while generating income. There are a lot of companies that seek to make a positive impact on sustainability; however, not all succeed in contributing toward sustainability. Finding a good company to invest in is essential. Investors determine which company to invest in based on the following factors:
The letter E in ESG stands for the Environment. A key factor in determining whether to invest in the company or not is analyzing how eco-friendly the company is. It means that all factors that affect the environment, such as waste management, carbon emissions, toxic wastes, noise pollution, use of chemicals, etc., are analyzed.
Human rights, race, gender, etc., are all social factors. Investors try to gather information regarding whether the company has violated human rights, the work environment, gender discrimination in the workplace, and whether the acts of the company follow labor law.
Governance deals with the management of the company. The management is the key decision-maker of the company and is responsible for making sure the tax code is in compliance with the rules, maintaining proper financial records and presenting before the shareholders, and conveying the state of affairs to the shareholders. If the management fails to do any of these, the company will have to face legal consequences.
Analyzing these factors will allow investors to make informed decisions on whether to invest in the company or not. In other words, these factors act as a tool to measure the company’s contribution toward sustainability. If a company operates and fulfils all the requirements, it is a good company to invest in.
How can you have proper ESG investing?
ESG investing can be quite difficult if you are just getting started. Like any investment, there are a lot of risks that you must be wary of while you invest. Moreover, there is a problem in analyzing whether the company checks all the requirements for ESG investing. To avoid all these hurdles, you can always approach investment managers and invest through them. For a small fee, they will make sure that your money is invested in the right company. They will also make sure that the company fulfils environmental, social, and governance criteria.
Food scarcity, depletion of natural resources, racial discrimination, climate change, and other social and environmental issues are still looming on the world and slowing down economic growth. Due to this, many companies have come forward to try and make a change in the world.
With ESG investing gaining prominence, such companies are getting sufficient financial support to invest more in solving these social and environmental issues.
Uendelevu umekuwa wasiwasi wa kwanza katika ulimwengu wa leo. Kwa sababu hii, kampuni zinakuja mbele na njia mpya za kuboresha uendelevu na kuchangia mashirika ambayo hujitahidi kutatua masuala ya kijamii na mazingira. Uwekezaji endelevu huwatia moyo wawekezaji kuwekeza katika makampuni kama hayo. Katika uwekezaji endelevu, kuna mifumo mbalimbali, kama vile uwekezaji wa uwajibikaji wa kijamii, uwekezaji wa kiuchumi, kijamii, na utawala, na uwekezaji wa athari. "Kutokana na mifumo hii, tunaweza kuangalia kwa karibu uwekezaji wa kiuchumi, kijamii, na utawala, pia inajulikana kama ""ESG.""" Ili kujibu swali la nini ni uwekezaji wa ESG, tunahitaji kuelewa lengo la uwekezaji endelevu. Uwekezaji endelevu inamaanisha kuwekeza katika makampuni na mashirika ambayo hufanya kazi kuelekea kutatua masuala ya mazingira na kijamii. Chini ya uwekezaji endelevu, wawekezaji hutafuta fursa ya kuwekeza kwa uwajibikaji, na kuzalisha faida nzuri. Ili kufanikisha hilo, wawekezaji hutathmini makampuni kulingana na mambo ya mazingira, kijamii, na utawala. Uwekezaji wa ESG ni maarufu miongoni mwa wawekezaji ambao wanatafuta kuchangia uendelevu wakati wa kuzalisha mapato. Kuna makampuni mengi ambayo yanajaribu kufanya athari nzuri kwa uendelevu; hata hivyo, si wote wanafanikiwa kuchangia uendelevu. Ni muhimu kupata kampuni nzuri ya kuwekeza. "Wekezaji huamua kampuni ya kuwekeza katika kulingana na mambo yafuatayo: ""E"" katika ESG inasimama kwa mazingira." Sababu muhimu katika kuamua kama kuwekeza katika kampuni au la ni kuchambua jinsi kampuni ni mazingira ya kirafiki. Hii inamaanisha kwamba mambo yote yanayoathiri mazingira, kama vile usimamizi wa taka, uzalishaji wa kaboni, taka zenye sumu, uchafuzi wa kelele, matumizi ya kemikali, nk, yanachambuliwa. Haki za binadamu, jamii, jinsia, nk, zote ni mambo ya kijamii. Wawekezaji hujaribu kukusanya habari kuhusu ikiwa kampuni imevunja haki za binadamu, mazingira ya kazi, ubaguzi wa kijinsia mahali pa kazi, na ikiwa vitendo vya kampuni hufuata sheria za kazi. Utawala inahusiana na usimamizi wa kampuni. Usimamizi ni mteuzi wa kampuni na ni wajibu wa kuhakikisha kanuni ya kodi ni katika kufuata na sheria, kudumisha rekodi sahihi ya kifedha na kuwasilisha mbele ya wanahisa, na kufikisha hali ya mambo kwa wanahisa. Usimamizi ukishindwa kufanya lolote la hayo, kampuni hiyo itakabiliwa na matokeo ya kisheria. Uchambuzi wa mambo haya itawawezesha wawekezaji kufanya maamuzi ya habari juu ya kama kuwekeza katika kampuni au la. Kwa maneno mengine, mambo haya kutenda kama chombo cha kupima mchango wa kampuni kuelekea uendelevu. Ikiwa kampuni inafanya kazi na inakidhi mahitaji yote, ni kampuni nzuri ya kuwekeza. Jinsi ya kuanzisha biashara ya ESG? Uwekezaji wa ESG unaweza kuwa ngumu sana ikiwa unaanza tu. Kama ilivyo na uwekezaji mwingine wowote, kuna hatari nyingi ambazo unapaswa kuwa makini wakati wa kuanzisha biashara. Kwa kuongezea, kuna tatizo katika kuchambua ikiwa kampuni inachunguza mahitaji yote ya uwekezaji wa ESG. Ili kuepuka vikwazo hivi vyote, unaweza daima kukaribia wasimamizi wa uwekezaji na kuwekeza kupitia wao. Kwa ada ndogo, watafanya kazi kuhakikisha kuwa pesa zako zimewekezwa katika kampuni sahihi. Pia watahakikisha kwamba kampuni inatimiza vigezo vya mazingira, kijamii, na utawala. Ukosefu wa chakula, uharibifu wa maliasili, ubaguzi wa rangi, mabadiliko ya hali ya hewa, na masuala mengine ya kijamii na ya mazingira bado yanatokea ulimwenguni na kupunguza ukuaji wa kiuchumi. Kwa sababu hii, makampuni mengi yamekuja mbele kujaribu na kufanya mabadiliko katika ulimwengu. Kwa kuwa uwekezaji wa ESG unazidi kuwa maarufu, kampuni kama hizo zinapata msaada wa kutosha wa kifedha kuwekeza zaidi katika kutatua masuala haya ya kijamii na mazingira.