Environmental, Social, and Governance (ESG) Investing
ESG is an approach to investing in companies and exchange-traded funds based on Environmental, Social, and Governance factors alongside more traditional financial metrics.
- Environmental: carbon emissions, waste management, pollution, use of fossil fuels
- Social: Workplace diversity, working conditions i.e. do they pay staff fairly?
- Governance: Ethical business practices, shareholder rights, executive compensation
Also called impact investing, tikanga-led impact investing, ethical investing, or responsible investing, it’s a strategy used by investors who want their investments to align with their values.
Kiwi charity Mindful Money has some great resources to check if your KiwiSaver fund’s holdings align with your values.
We acknowledge and thank the FMA, Dr Karena Kelly and Brook Taurua Grant, the RBNZ and the Māori Dictionary for their research which helped us with te Reo Māori kupu for this glossary.
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