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.