ESG is an acronym for a portmanteau of concerns. In the wake of the GFC, regulators worried that investment analysis was blinkered, focusing too narrowly on financial measures, turning a blind eye to issues of governance and ignoring off-balance sheet risks. At the same time, the perception that the GFC was caused by the amoral actions of banks and financial analysts led to a resurgence of interest in portfolios that reflected investors’ moral convictions.
These various concerns, although referred to collectively as
, were only loosely related. Lacking a common purpose, the
movement spawned a terminological zoo: styles of investment being variously and enthusiastically described as ‘Responsible’, ‘Sustainable’ or ‘Ethical’; and investment objectives ranging from ‘Doing Well by doing Good’, through ‘Impact’ to pure philanthropy.