What is ESG investing?

Environment, social, and governance (ESG) investing is on the rise. Here’s what you need to know about this approach to investing your money sustainably.

When you think of investing, what image springs to mind? If it’s the ruthless, Gordon Gekko-esque figure of the 80s and 90s, push it aside. Over the past decade, investing has gone and got itself a conscience.

Karen Deenihan, Aviva Life & Pensions Ireland DAC
Karen Deenihan, Aviva Life & Pensions Ireland DAC

The value of an investment is no longer just about how much money it can make you – but also about the positive impact it can have on the world. And that’s where ESG investing comes in.

ESG – or environment, social, and governance investing, for those not keen on acronyms – has been gaining popularity particularly. In a 2022 survey conducted by Aviva 8 in 10 pension investors agreed that it’s important to consider ESG factors when investing in their pension1.

And it’s not just woke millennials getting involved either, 8 in 10 pension holders over the age of 55 believe this is an important1.  But what does putting your money into ESG funds mean – and how can you be reassured your money is actively doing good? Here’s what you need to know about ESG investing.

ESG investing: the basics

Taking an ESG approach to investing means that an investor will take environmental, social, and governance criteria into account when they’re considering investing in an asset.

So, if an investor was looking at putting their money into a company, they’d assess:


How the planet is treated

Environmental factors look at how the natural world is being affected. Factors such as a business’s energy consumption, their policy on climate change, their waste production, deforestation, biodiversity, and waste of water all play a part.


How people are treated

Social factors focus on how people and their lives are affected by the company’s community engagement, how well they protect human rights, and address issues such as modern slavery, their employee relations, gender diversity, and their working conditions.


How a company is run

Governance factors look at the way the business is run – such as the quality of management, the diversity of the board, conflicts of interest, whether there is bribery or corruption, whistle-blower schemes, and contributions to politics.

What about return on investment?

Evaluating ESG criteria is a way of enhancing traditional financial analysis, not replacing it. The aim isn’t solely to make sure that investment is ethical; the main objective of ESG, as with any investment, is financial performance.

Of course, as with any investment, the value of ESG funds could always go down as well as up and you could get back less than you put in.

Learn more about ESG investing in this short video brought to you by Aviva

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Video starts


Aviva research indicates that environmental, social and.


Governance investing, or ESG investing for short.


Is important to 70% of Irish pension investors. No wonder ESG investing is gaining traction.


Research is increasingly showing that this investing.


Method can reduce portfolio risk, generate competitive investment returns and help investors feel good.


About the funds they invest in. In a nutshell, ESG investing involves researching.


And considering environmental, social and governance issues.


In addition to other factors such as financial criteria when evaluating different investments.


For inclusion in investments funds e are environment concerns, how corporations interact with the physical environment such as climate change, biodiversity, natural resources, carbon emissions, air and water.


Pollution, and energy use.


S for social looks at the impact companies have on society and communities, including human rights, health and safety issues, labour standards, product liability, privacy and data security. Qi or Governance focuses on how companies are governed, including diversity, transparency, ownership board independence, ethics and executive compensation.


ESG investing has become mainstream and for many investors around the world, and it's a requirement that must be considered before they invest.


Aviva offer Responsible Fund investment options across are managed for you, managed with you and managed by you propositions. For example, through our managed for you and managed with you propositions, we offer a range of funds from Aviva Investors who integrate ESG into their investment processes where possible. This includes our range of Aviva multi asset ESG funds. Aviva Investors is the asset management part of the Aviva Group and a Global Asset Manager with integrated experience across all major asset classes. Aviva Investors engage and meet with global companies to encourage them to change and build a substantial business for the future. And they're at the forefront of encouraging overall market reform, helping to drive regulatory change across financial markets. To encourage better practise and drive meaningful change. Aviva Investors has a dedicated team of over 30 ESG analysts and have built ESG considerations into their investment processes. What this means is that when they're considering whether to include individual investments such as company shares in your investment fund.


They will analyse traditional financial metrics alongside.


ESG criteria such as impact on the environment, company culture and corporate governance. Aviva Investors is a pioneer in responsible investments. They've been actively voting since 1970 to encourage responsible behaviour by companies and to consider ESG criteria. Today they are recognised as a global leader in ESG investing. They are a founding member of the UN Principles for Responsible Investing and today they're a plus rated for their approach as part of the Aviva Group. Their ambition is to be net zero for investments by 2040, ten years ahead of the Paris Agreement target. To learn more about Aviva's multi asset ESG funds and other ESG investment options available from Aviva, please contact your financial broker or visit www. Addiva ie ESG you.


Video ends

Interested in ESG investing?

Visit our ESG hub to learn more about how we’re acting and investing responsibly.


Important information to consider.

Warning: Past performance is not a reliable guide to future performance.

Warning: The value of your investment may go down as well as up.

Warning: These funds may be affected by changes in currency exchange rates.

Warning: If you invest in this product you will not have access to your money until you retire.

1. Source: iReach survey carried out on behalf of Aviva October 2022.  The survey covers 458 Irish pension holders.ource: iReach survey carried out on behalf of Aviva May 2021.  Survey covers 570 Irish pension holders.

Aviva Life & Pensions Ireland Designated Activity Company, a private company limited by shares. Registered in Ireland No. 165970. Registered office at Building 12, Cherrywood Business Park, Loughlinstown, Co. Dublin, D18 W2P5. Aviva Life & Pensions Ireland Designated Activity Company, trading as Aviva Life & Pensions Ireland and Friends First, is regulated by the Central Bank of Ireland. Tel (01) 898 7950.