More than just returns
For many years investing was about one thing — returns. The higher the better. But the world has changed. Climate crisis, social inequality and corporate scandals have led investors to ask a new question: How does the company make its money?
ESG investing is about evaluating companies not just on financial results — but also on how they affect the environment, treat employees and customers, and are managed by leadership.
"What you support with your money is what you support with your life. Choose wisely — for both matter."— Florence Scovel Shinn
What do E, S and G mean?
E — Environment
How does the company affect the environment?
Examples: CO2 emissions · Energy use · Water consumption · Waste management · Climate risk · Renewable energy
S — Social
How does the company treat people?
Examples: Working conditions · Pay and equality · Human rights · Supply chain · Product safety · Community engagement
G — Governance
How is the company managed?
Examples: Board composition · Executive pay · Shareholder rights · Anti-corruption · Transparency · Audit procedures
Does ESG investing give lower returns?
This is the most common question — and the answer surprises many.
Research shows that ESG investments over time deliver equal or better returns than traditional investments. The reason is that companies with good ESG scores are often better managed, take less risk and are more sustainable in the long term.
Meta-analysis: A review of over 2,000 studies found that 63% found a positive relationship between ESG and financial returns. Only 8% found a negative relationship.
Greenwashing — watch out for this
Greenwashing means a company or fund markets itself as more sustainable than it actually is. Unfortunately it is widespread.
Signs of greenwashing
Vague environmental claims without documentation · Focus on one green product line while the rest of the business is dirty · ESG report without concrete numbers and goals
Norway — a world leader in ESG
Norway is actually a pioneering country in ESG investing. The Oil Fund excludes companies based on ethical criteria and actively uses shareholder power. Ironically Norway — one of the largest oil exporters in the world — is also one of the most advanced countries in responsible investing.
How to get started with ESG investing
- Decide what matters to you — climate, human rights, governance?
- Choose a low-cost ESG fund
- Check the fund exclusion list — what do they not invest in?
- Read company sustainability reports before buying individual stocks
"Money is not good or evil in itself — it is what you do with it that matters. Invest in what you want to see more of in the world."— Florence Scovel Shinn