What is 'ESG integration'?

ESG integration refers to the incorporation of environmental, social, and governance factors into investment decisions, which allows investors to assess potential risks and opportunities that may not be reflected in traditional financial analysis alone. By including these non-financial metrics, investors gain insights into how various factors can influence the long-term performance and sustainability of their investments.

This approach recognizes that companies addressing environmental and social issues, as well as maintaining strong governance practices, are better positioned to manage risks and capitalize on opportunities, ultimately leading to better financial performance and value creation over time. ESG integration encourages a comprehensive view of investment risks and opportunities, aligning investor objectives with broader social and environmental goals.