Sustainable investment and finance incorporates environmental, social and governance factors in financial services decision-making alongside more traditional financial criteria. This may be for purely financial reasons or to achieve additional objectives alongside financial aims. It may enable superior risk management, seek to identify new opportunities or ensure that sufficient weight is given to long-term factors. It is an approach that has increasing traction worldwide within investment and financial services.
A range of investment strategies and products are currently available. These may support responsible business practices, environmental stewardship, social well-being and/or sustainable economic growth.
Sustainable investment and finance may sometimes be described as ‘green’, ‘ethical’, ‘responsible’, ‘sustainable and responsible’ and/or ‘ESG’. UKSIF uses these terms to describe use of any sustainable and responsible investment and finance approach, although others may sometimes use them in narrower ways. The European SRI Study provides widely-agreed names and definitions of the strategies commonly used within sustainable investment.
ESG stands for Environmental, Social and Governance. ESG information is taken into account by some investment managers and research providers in their analysis of investment opportunities or when they exercise responsibilities associated with the ownership of assets. Therefore, ESG investing is often used to mean the same as sustainable investing or sustainable and responsible investing (SRI).
The sustainable investment market in the UK is worth some £1.57 trillion (as of 31 December 2013), representing a 59% increase in AUM compared with the end of 2011.
Details on the techniques used, and a breakdown of the market by technique are available here in the 2014 European SRI Study.
If you have a specific question, we suggest you browse our site using the search bar above.
Unfortunately, UKSIF does not have the resources to provide help to students writing their dissertations or conducting research in sustainable investment and finance.
UKSIF is not authorised to provide investment advice.
If you have a significant amount to invest, we recommend that you contact an independent financial adviser who specialises in sustainable and responsible investing. For example, the Ethical Investment Association lists financial advisers who are committed to increasing access to sustainable investment advice and improving their own professional knowledge.