ESG investing From ESG to philanthropy
An array of new forms of investing have taken root in recent years, bridging the gap between investments aimed exclusively at earning returns and philanthropic donations motivated purely by values.
One of the most widely employed new forms of investing is investments that pursue financial objectives while factoring in environmental, social and governance (ESG) criteria.
The illustration below visualizes the spectrum ranging from traditional financial investments to philanthropic donations. At the purely philanthropic end of the spectrum, one gives without expecting a return. At the other end, traditional financial investments seek nothing other than to maximize returns. There are various gradations in between.
The concept of sustainable investing denotes an investment strategy that takes environmental, social and governance (ESG) aspects into consideration alongside traditional valuation criteria when making investment decisions. The goal is to generate attractive financial returns sustainably. Sustainable investments are often aligned with personal values. Sustainable investing can enhance transparency, reduce risk and generate sound financial returns while fostering positive social and environmental change in line with the UN’s Sustainable Development Goals (SDGs).
The concept of impact investing denotes investments that seek to generate a financial return while exerting a measurable beneficial effect on society and the environment. Credit Suisse offers clients impact investing solutions that place the envisaged impact in the foreground but also aim to earn adequate market returns.