Tobacco is perhaps the easiest and most clear cut of issues, but it illustrates how ESG considerations can be driven by value rather than values and are essential for all investors.
Investors do not need to set out to transform the world, but they do need to recognise that all companies need to think and act sustainably to avoid risk and maximise opportunity.
Perhaps, therefore, ESG integration should not actually exist in its own right; there should be ‘investing’, in which all the facets of an investment are considered, and ‘non-ESG-integrated investing’, in which decisions are made by considering only a subset of the available information.
Who would consider investing in the latter?
Lewis Grant is global equities senior portfolio manager at Hermes Investment Management