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ESG Investing

Written by Michal Park – Senior Financial Adviser

For this month’s Hudson Newsletter, I wanted to expand on the information I presented in my Tuesday Chat this week – the idea of ESG Investing (Ethical, Social, and Governance).  This investing simply put, is applying non-financial criteria as a part of an analysis of whether to invest in a certain company. Or not.

These non-financial criteria essentially look beyond the mere financials – they delve deeper into the culture of a company, as follows:

Environmental (conservation of the natural world)

– Climate change and carbon emissions
– Air and water pollution
– Biodiversity
– Deforestation
– Energy efficiency
– Waste management
– Water scarcity

Social (consideration of people and relationships)

– Customer satisfaction
– Data protection and privacy
– Gender and diversity
– Employee engagement
– Community relations
– Human rights
– Labour standards

Governance (standards for running a company)

– Board composition
– Audit committee structure
– Bribery and corruption
– Executive compensation
– Lobbying
– Political contributions
– Whistleblower schemes

One of the bigger issues that I found very confronting is that of contemporary slavery (modern slavery) – enslaving people not to own/be mean to them but to make a profit. An economic crime, if you will.  Generally limited to those born into extreme poverty,  bonded or forced migrant labour occurs when people give themselves into slavery as a security against a loan or when they inherit a debt from a relative.  The cycle begins when they begin to work off the debt that can never be paid off – and is often passed down for generations.  Alternatively, people can be enticed into migration with the promise of work, only to have their documents seized and be forced to work under the threat of violence to them or their families.

You can discover your own contribution to supporting modern slavery by undertaking the exercise on slaveryfootprint.org.  I was horrified to find out that I have 51 slaves working for me – it’s a lot to digest.

So if you’re like me, and starting to question your global footprint, perhaps it’s an opportunity to explore how you can invest in a more socially conscious way.

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