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What is sustainable investing and what is ESG investing with ABN AMRO?


Sustainable investing explained

Sustainable investing is a form of investing that does not revolve solely around financial returns, but also looks at the sustainable impact of your investment portfolio. It means that when you compile your portfolio you choose companies that show excellent performance in the domains of people, the environment, and society.

A sustainable investment is:

  • An investment that contributes to achieving an environmental or social objective.
  • Furthermore, the company in which you invest must not have an adverse impact on other environmental or social objectives. Investing in wind turbines, for example, constitutes a positive contribution to achieving an environmental goal. But if these wind turbines are installed in a nature reserve, they have an adverse impact on biodiversity. 
  • The company must also follow good governance practices. 

When an investment meets these three criteria, we consider it a sustainable investment. In addition to sustainable investments, we also have ESG investments. ESG stands for environmental, social and governance. These investments meet a number of sustainability criteria, but not all the criteria that sustainable investments must meet.


ESG investing explained

Sustainable investing can best be described as an investment strategy that considers sustainability factors in addition to the financial aspects. A term often heard in this context is ESG, or environmental, social and governance.

For the ‘environmental’ part of the ESG factors, we examine the positive contribution a company makes in terms of environmental challenges and its performance in this regard. We look at the steps a company is taking to reduce carbon emissions, water usage and the amount of waste generated. We also ask questions like ‘Does the company actively recycle?’ and ‘Does the company report on its own environmental impact?’.
For the ‘social’ aspect we look at how a company treats its employees. Does a company ensure working conditions are safe and pay its employees a fair wage ? Does the company have an anti-discrimination policy, for example? How does the company treat its suppliers? What is the company doing to exclude child labour from its manufacturing chain?
For the ‘governance’ aspect we examine how a company is managed, asking questions like ‘Is the company susceptible to corruption?’ and ‘What is the composition of the Supervisory Board?’. We also look into whether the company is involved in political lobbying and, if so, whether they have a transparent policy about this. And we consider how transparent the company is in terms of its policy and activities. 

Investing involves risks

Investing involves risks. You could lose (some of) the money you invested. If you are going to invest, it is important that you are aware of this. Invest with money you can spare. Read more about the risks associated with investments.