ESG (Environmental, Social, and Governance) investments focus on investing in companies that prioritize sustainable and ethical practices. This kind of investment aims to generate long-term value not only for investors but, also for society and the planet.
The difference between ESG and Non-ESG funds is that the last one invests in companies that provide products or services that are harmful to the planet or society, such as those involved in tobacco manufacturing. As a result, it can be considered a high-risk investment because their stocks are more volatile and open to large price fluctuations in the stock market; also due to government regulation that may restrict investments in certain industries or companies that are considered controversial or high-risk.
Investing in ESG funds in Ireland can offer benefits such as
- Aligns your investments with your values.
- Supports companies that prioritise sustainable and ethical practices.
- ESG funds may even perform better in the long term than traditional funds.
- You might be able to lower your overall investment risk by making an investment in these businesses.
- ESG funds typically have a strong focus on transparency and disclosure, which can help investors better understand the companies they are investing in.
- In Ireland and across the European Union, there is growing regulatory and policy support for ESG investments, which can help to create a supportive environment for ESG investing and potentially drive future growth in the sector.
- Overall, investing in ESG funds in Ireland can provide a way to generate financial returns while also supporting positive social and environmental outcomes.