Environmental, Social and Governance (ESG) factors allow businesses to measure the sustainability credentials and the corporate impacts of an investment, typically through benchmarking of non-financial performance against peers. In an evolving context where stakeholders become even more important than shareholders, ESG unveils the integrated value of an asset, beyond its short-term financial performance, based on the associated environmental and social impacts and outcomes.

This concept is not new. In the 1990s the industry used to refer to it as the "triple bottom line" (i.e. People, Planet and Profit) as opposed to the "single bottom line" represented by the figure usually recorded in traditional business accounting at the end of a profit and loss statement. Now, pushed by threats such as climate change and biodiversity collapse along with the rising influence of Generation Y ("Millennials") who expect more environmental and social responsibility from the companies they work for and buy from, investment managers have decisively turned their undivided attention to ESG and sustainable developments that allow not just the economy, but also the society and the environment to thrive.

Track records are now showing that strong ESG credentials are statistically linked to future-proofing, risk minimisation and financial stability, which in turn provide better access to credit, at lower interest rates, thus generating higher returns especially in the long term. Improving ESG performance over time often results in resources optimisation (e.g. less energy, water, waste, carbon emissions) and staff retention (e.g. a more engaged, loyal and productive workforce), which makes a business more responsible but also more resilient. Again, if we're smart enough to avoid greenwashing, ESG can create virtuous processes that reassure the investors and help attract new ones.

And if we think that all of this is really just a by-product of behaving responsibly with regard to the planet, the society, nature, our children and the future generations...well, isn't it amazing?

We are a boutique consultancy proud to offer at global level bespoke ESG technical solutions to our Clients through a committed network of passionate sustainability experts who share the same sense of responsibility, ethics, ambition and most importantly a fiery passion for sustainability. Please browse our website to find out more about us and don't hesitate to make contact at your convenience.

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