The trend towards environmental, social and governance (ESG) investing has gathered significant momentum in recent years, as investors recognise the importance of its long-term value. Even amid the Covid crisis, the value of assets in sustainable funds worldwide hit a record £3.1tn in 2021, according to financial services firm Morningstar. But, although fund managers have clearly focused on the environmental aspect of ESG, they have lacked the same level of interest in the social element.
Carlota Esguevillas is a responsible investment analyst at fund manager EdenTree. She reports that, “while investors have flocked to act on climate change, issues like human rights have received notably less attention”.
In their search for lucrative new opportunities, investors are looking ever further afield for opportunities. Some potential investees will be operating in countries where human rights abuses are common.