ESG Investing

ESG (Environmental, Social, and Governance) investing has become increasingly popular in recent years, with many investors incorporating ESG factors into their investment decisions. This approach takes into account not only financial performance, but also the environmental and social impact of the companies being invested in, as well as the quality of their governance structures. 

One argument for incorporating ESG factors into investment decisions is that companies with strong ESG performance may be less risky investments. Academic research supports this argument, with a study by MSCI finding that companies with high ESG ratings had lower volatility and were less likely to experience large price declines. Additionally, a study by Deutsche Bank found that companies with higher ESG scores had lower credit risk and lower costs of debt financing. 

Furthermore, there is evidence to suggest that companies with strong ESG performance may be more likely to outperform financially over the long-term. A study by Harvard Business School found that companies with strong ESG performance had higher profitability and were more likely to experience positive future stock returns. 

At Halleywell, we recognise the importance of incorporating ESG factors into our investment decisions. By investing in companies with strong ESG performance, we aim to not only reduce risk for our clients but also contribute to a more sustainable and equitable future. We use a clear and rigorous screening process to identify companies with strong ESG performance and incorporate them into our portfolios alongside our focus on quality growth investing. Ultimately, we believe that incorporating both quality and ESG factors into our investment decisions can lead to better long-term outcomes for our clients. 

The views expressed in this article are not intended as an offer or solicitation for the purchase or sale of any investment or financial instrument, including interests in any of Halleywell’s investment solutions. The information contained in the article is fact-based and does not constitute investment research, investment advice or a personal recommendation, and should not be used as the basis for any investment decision. Any references to specific securities are included for the purposes of illustration only and should not be construed as a recommendation to buy or sell these securities. This article does not take into account any potential investor’s investment objectives, particular needs or financial situation. There are risks with almost every investment that you may not get back the original capital invested. The value of your investments may fall as well as rise and the past performance of investments is not a guide to future performance. This article reflects Halleywell’s opinions at the date of publication only, the opinions are subject to change without notice and Halleywell shall bear no responsibility for the opinions offered. Prospective investors should take advice from a professional adviser before making any investment decisions. This financial promotion is issued by Halleywell Limited.