Sustainable investment or finance is a term that is often used synonymously with, socially responsible investing, mission-related investing, or screening. All of these terms sit more broadly under the Environmental, Social and Governance (ESG) investment framework.
ESG criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. Environmental criteria look at how a company performs as a steward of nature. Social criteria examine how a company manages relationships with its employees, suppliers, customers and the communities where it operates. Governance deals with a company’s leadership, executive pay, audits and shareholder’s rights.
Sustainable finance includes a strong green finance component that aims to support economic growth whilst reducing pressures on the environment, addressing green-house gas emissions and tackling pollution, minimising waste and improving efficiency in the use of natural resources.
As this asset class attracts more attention from investors, ISLA is working with the relevant industry stakeholders as well as the regulatory community to ensure that the important fundamentals to allow this market to develop, are implemented within our existing legal and best practice frameworks.