Having learnt about investment risk management through diversification, have you also heard about the increasingly popular investment approach called ESG investment? ESG refers to Environment, Social and Governance; and ESG investment means considering more on a corporate's ESG quality in order to seek for achieving sustainability in investment and lowering potential risks. Let's dive deeper into possible ways to carry out ESG investment, as well as how it can contribute to a sustainable future and the potential positive association to your investment.
Investing in ESG is easier than you think. When you select an asset to invest in, just consider a bit more on its ESG quality – Is the corporate being responsible to the environment? Does it respect social values? Does it treat staff the right way? Taking the financial performances and ESG factors into consideration when making investment decisions can help you assess the potential returns and risks of a company thoroughly, or projects you are going to invest. Start to learn more about ESG investment today.
To smart investors, ESG investment can be a “quid pro quo” - investing in assets with high ESG quality benefits the sustainable world, and it will return the favour by managing certain risks. In fact, corporates that do not care about ESG may bear comparatively higher risks – court cases due to pollutions, disputes about labour rights or even penalties from regulatory bodies. These risks may impact the reputation or even financial performance of a corporate, compromising your return. Investing in corporates with high ESG quality will help avoiding such risks, raising the certainty of growth.
There is already over 1.2 trillion US dollar worth of ESG related asset globally, and the Hong Kong market is now catching up at a full speed. For example, corporates are raising their transparency, the market is also introducing more and more ESG themed investment choices, such as Investment Funds, SimplyFund and Equity Linked Investments (ELIs). Investors, corporates and regulatory bodies are joining hands to pave way for a better future for ESG. It will be right on track to attract even more capital, providing long term return to investors.
Lastly, if you would like to know more about ESG and Hang Seng Bank's ESG vision, how about reading from Environmental, Social and Governance (ESG) webpages?
All investments involve risks (including the possibility of loss of the capital invested). Prices of investment products may go up as well as down and may even become valueless. Investors should not only base on this material alone to make any investment decision, but should read in detail in the relevant risk disclosure statements before making any investment decision.