ESG (Environmental, Social, and Corporate Governance) investments represent a growing category of financial instruments that evaluate companies based not only on their financial profitability but also on their environmental impact, social responsibility, and business ethics.
The environmental component examines a company's impact on the natural world, including the reduction of direct and indirect greenhouse gas emissions, efficient management of water and energy resources, waste management and reduction, natural resource conservation, climate change response strategies, and sustainability contributions. Companies investing in green initiatives and technologies receive higher ratings in this category.
The social aspect focuses on a company's relationships with its employees, customers, communities, and other stakeholders. This encompasses fair working conditions, employee health and safety considerations, gender equality, social responsibility, and community engagement and volunteering initiatives.
Corporate governance addresses the company's management structure – transparency, business ethics, and relationships with shareholders. This includes shareholder rights, appropriate risk management in investments and operations, and anti-corruption measures.
Investment in ESG financial instruments has generated significant interest and activity in global capital markets in recent years. This topic has received increasing emphasis in corporate operations both domestically and internationally, with enhanced disclosure in published financial reports.
How can investors participate in this sector through capital markets? One approach is direct investment in stocks of companies operating in the green sector or those with high ESG ratings. Another option is through sector-specific index funds - funds specializing in various aspects of the field such as green energy and environmental quality.
This information should not be considered a substitute for personalized investment advice.