What is the difference between ESG investing, sustainable investing and impact investing?
ESG investing, sustainable investing and impact investing are some of the many terms used to describe investment approaches that consider environmental, social and governance issues. These are often used interchangeably.
A key to understanding how ESG investing sits within the investing spectrum is that while some (e.g. ethical investing) make moral or ethical goals a primary purpose, and some (e.g. impact investing) make impact generation a primary purpose, ESG investing can and should also be pursued by the investor whose sole focus is financial performance.