Last Updated on 9 January 2021 by F.R.Costa

Why not go environmental, social and governance friendly? Article originally published at Master Investor Magazine November 2019 Issue 56 p.36-41.

ESG investment is a strategy that adds environmental concerns, social awareness and good corporate-governance practices to traditional financial analysis. Unlike what many thank, this is not a traditional filter but rather a new way of investing, which doesn’t need to sacrifice on returns.

ESG investors choose companies on the basis of the ESG attributes they demonstrate. While higher ethics standards may lead companies to rank higher in ESG filters, that should be because such standards are expected to maximise long-term profits. The ESG criteria added to the investment process are expected to improve the risk-return profile.

It’s not just possible to build a core ESG portfolio – it’s desirable, as it should improve the long-term expected return while reducing risk.

Find out more about being environment, social and governance friendly without sacrificing returns, by reading my full article at Master Investor, for free.

About F.R.Costa

Filipe has more than 20 years experience with financial markets. He holds a degree in Economics with a specialisation in Finance and he's currently finishing a PhD in Finance. He used to work as financial consultant and research associate but then decided to return to academia five years ago. Since that, he has been an Invited Lecturer, teaching courses on Investments, Financial Markets, and Monetary Economics. He is also a regular contributor writer at The Master Investor Magazine.

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