ESG Investments

Running head: ACCOUNTING AND FINANCIAL MANAGEMENT
ACCOUNTING AND FINANCIAL MANAGEMENT’
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Author’s Note

ACCOUNTING AND FINANCIAL MANAGEMENT1
Table of Contents
INTRODUCTION:..............................................................................................................2
ENVIRONMENT:...............................................................................................................2
SOCIAL:..............................................................................................................................3
GOVERNANCE:.................................................................................................................4
CONCLUSIONS:................................................................................................................5
REFERENCE:.....................................................................................................................6

ACCOUNTING AND FINANCIAL MANAGEMENT2
INTRODUCTION:
ESG investments are a type of investment that can also be termed as the sustainable
investments. ESG investment has a huge impact on the society in the long run. The abbreviation
of ESG investment is Environmental, Social and Governance Investment. ESG investment has
considerable effect on the environment and the business performance of the company. ESG has
different types of sustainable investments. This includes impact investment, socially responsible
investing and value based investments (Tyagi 2014). As per Financial Times Lexicon, ESG is a
term that is mostly used in the capital market by the participants of the market while evaluating
the corporate behaviour of the company. The term is also used while assessing the financial
performance of the companies.
ENVIRONMENT:
The abbreviation of “E” stands for environment. The environmental criteria mainly
includes the company’s use of energy, company’s decisions regarding the dumping of waste and
restricting the rate of pollution in the environment. The treatment of animals by the company
also falls under the environment part of ESG. The environmental part of the ESG encourages the
company to implement and evaluate the environmental risks that the company can bring to the
environment. ESG plays a vital role in assisting the company to manage the environmental
related risks (Fatemi, Glaum and Kaiser 2018). For example the implementation of the policies
regarding the dumping of company’s waste falls under the purview of the ESG activity of the
company. Managing of toxic emissions, restricting the company to contaminate the land and also
maintaining the rules and regulations that the government imposed for safeguarding the
environment is all falls under the purview of ESG activity of the company.