Environmental, Social, and Governance (ESG) investing has moved from niche to mainstream in the UK. But is it just a trend, or a permanent shift in how we invest?
What Is ESG Investing?
ESG investing considers more than just financial returns. It evaluates companies based on their environmental impact, treatment of employees, diversity, ethical governance, and more.
Why It’s Growing in the UK
- Investor demand: Millennials and Gen Z prefer values-aligned portfolios.
- Regulation: UK policymakers and the FCA are pushing for climate-conscious investment standards.
- Performance: Many ESG funds have matched or even outperformed traditional funds in recent years.
How to Start ESG Investing
- Choose ESG-rated funds or ETFs from reputable providers (e.g. Vanguard, Legal & General).
- Review the fund’s methodology—some exclude harmful industries, others focus on sustainable leaders.
- Monitor performance and ensure it aligns with your goals and values.
Trend or Transformation?
All signs point to transformation. ESG is influencing corporate behaviour, fund design, and investor expectations. As sustainability becomes a global priority, ESG investing is likely to remain a cornerstone of modern portfolios.
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