ESG 101
Understanding the language
What is ESG and what does it stand for?
ESG is used synonymously with sustainable investing, responsible investing (RI), mission-related investing or screening.
It stands for:
- Environmental: climate change, natural resources, pollution, waste and environmental opportunities.
- Social: human capital, product liability, stakeholder opposition and social opportunities.
- Governance: corporate governance and corporate behaviour.
Please note: the items listed above for each factor are not exhaustive, they are examples of each factor.
What is ESG integration?
At Goodbody Asset Management, we define ESG integration as explicitly incorporating relevant ESG information into our investment research process to help enhance the risk-adjusted returns of the funds we manage.
What is engagement?
An active dialogue between investors and companies on environmental, social and governance factors. It provides investors with the opportunity to discuss ESG risks and opportunities with companies.
What is responsible investment?
It is a strategy and practice to incorporate environmental, social and governance factors into investment decisions and active ownership.
What is the UN PRI?
The United Nations (UN) Principles for Responsible Investment (PRI) is the world's leading proponent of responsible investment. Developed by investors, for investors, it works to understand the investment implications of ESG factors and to support its international network of investor signatories in incorporating these factors into their investment and ownership decisions.
The six principles are a voluntary and aspirational set of investment principles that offer a menu of possible actions for incorporating ESG issues into investment practice. Goodbody Asset Management has been a signatory since 2020.
What is the Sustainable Finance Disclosure Regulation (SFDR)?
Effective from 10 March 2021, SFDR is a European regulation introduced to improve transparency in the market for sustainable investment products, to prevent greenwashing and to increase transparency around sustainability claims made by financial market participants.
Want to learn more about our approach to ESG integration?
At Goodbody Asset Management, we believe in the power of active management. We rely on deep fundamental research to identify attractive investments globally that can deliver strong risk-adjusted returns over the long term for our investors.
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Goodbody Stockbrokers UC, trading as Goodbody, is regulated by the Central Bank of Ireland. In the UK, Goodbody is also subject to regulation by the Financial Conduct Authority. Goodbody is a member of Euronext Dublin and the London Stock Exchange. Goodbody is a member of the group of companies headed by AIB Group plc.
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